Suppose Aggregate Output Is Demand-Determined

question 15

Multiple Choice

Suppose aggregate output is demand-determined.Which of the following will lead to an increase in the simple multiplier?

• A)an increase in the marginal propensity to consume
• B)a decrease in the marginal propensity to consume
• C)a decrease in autonomous consumption
• D)an increase in autonomous consumption
• E)an increase in investment

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Definitions:

Investment

Assets that are purchased with the expectation that they will generate income or appreciate in the future.

Condensed Balance Sheets

A simplified financial statement showing the summary of a company's financial position, including assets, liabilities, and equity at a specific point in time.

Excess Consideration

The amount by which the price paid for an acquisition exceeds the total fair value of its identifiable net assets.

Noncurrent Assets

Assets not expected to be converted into cash, sold, or consumed within one year or the operating cycle, such as property, plant, and equipment.