Suppose Aggregate Output Is Demand-Determined

question 27

Multiple Choice

Suppose aggregate output is demand-determined.If the business community decreases its planned investment expenditures by $4 billion,causing equilibrium national income to fall by $20 billion,the marginal propensity to spend must be

• A)2/5.
• B)1/3.
• C)1/2.
• D)4/5.
• E)5.

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Definitions:

Cost Variance

The difference between the budgeted cost of work performed and the actual cost of work performed on a project.

Estimate To Complete

A financial analysis projecting the cost required to finish a project based on its current status and past performance.

Parametric Estimates

Estimation technique using statistical relationships between historical data and variables to calculate cost, duration, and resource requirements.

Parameters

A set of boundaries or limits that define the scope and operating conditions of a system, project, or experiment.