Consider the Simplest Macro Model with Demand-Determined Output

question 114

Multiple Choice

Consider the simplest macro model with demand-determined output.Suppose an increase in business confidence leads firms to increase investment in new equipment by $3.5 billion.The marginal propensity to spend in this economy is 0.6.What is the eventual total new expenditure in this economy due to the increase in investment?

• A)$2.1 billion.
• B)$5.8 billion.
• C)$3.5 billion.
• D)$7.0 billion.
• E)$8.75 billion.

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Definitions:

Episodic Memory

A subtype of long-term memory that involves the recollection of specific events, situations, and experiences from one's life.

Prospective Memory

The dimension of memory involved in the recollection of actions planned for future execution or intended future plans.

Hippocampal Region

An area of the brain involved in memory formation, navigation, and the consolidation of information from short-term to long-term memory.

Memory Impairment

A decrease in the ability to remember information or events, which can be caused by various conditions including brain injury, disease, or psychological trauma.