Consider a Simple Macro Model with Demand-Determined Output

question 32

Multiple Choice

Consider a simple macro model with demand-determined output.At the equilibrium level of national income,

• A)consumers' purchases of goods and services equal firms' purchases of investment goods.
• B)firms will hold no inventories of raw materials or final goods.
• C)desired aggregate expenditures will equal total output.
• D)desired aggregate expenditures will equal total output minus inventory holdings.
• E)consumers' purchases of goods and services equal their saving.

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Definitions:

Marginal Rate of Substitution

The rate at which a consumer can substitute one good for another while maintaining the same level of utility or satisfaction.

Hunting Lodge

A place of accommodation often located in remote areas for people engaging in hunting or seeking rustic outdoor experiences.

Pure Public Good

A good that is non-excludable and non-rivalrous, meaning its use by one individual does not reduce its availability to others and cannot be withheld from those who do not pay for it.

Voluntary Contributions

Financial or resource donations given by individuals or entities by choice rather than as a result of taxation or legal obligation.