Consider the Simplest Macro Model in Which Aggregate Output Is

question 140

Multiple Choice

Consider the simplest macro model in which aggregate output is demand-determined.If autonomous consumption increases by $2 billion causing equilibrium national income to rise by $6 billion,the marginal propensity to spend must be

• A)1.0.
• B)0.5.
• C)0.2.
• D)0.67.
• E)3.0.

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Definitions:

Goodwill Recognition

The process of accounting for the excess of purchase price over the fair value of identifiable assets and liabilities of an acquired entity.

US GAAP

United States Generally Accepted Accounting Principles, the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC).

IFRS

International Financial Reporting Standards, a set of accounting guidelines that govern how financial statements are prepared worldwide.

Reporting Units

Entities for which discrete financial information is available and reviewed by the segment manager to make operating decisions.