In a Simple Macro Model with No Government and No

question 106

Multiple Choice

In a simple macro model with no government and no foreign trade,the equilibrium level of national income is the level of income at which

• A)aggregate desired expenditure is greater than actual national income.
• B)aggregate desired expenditure equals actual national income.
• C)aggregate desired expenditure equals consumer spending.
• D)saving equals income.
• E)saving equals consumer spending.

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Definitions:

Strike Price

The predetermined price at which an option can be exercised.

Time-to-Maturity

The remaining period until a financial instrument, such as a bond or loan, reaches its due date and must be repaid in full.

Put Option

A financial contract that gives the owner the right, but not the obligation, to sell a specified amount of an underlying asset at a specified price within a specified time.

Sell Calls

An investment strategy involving the selling of call options, where the seller grants the buyer the right to purchase an underlying asset at a specified price within a certain period.