Consider a Simple Macro Model with a Constant Price Level

question 119

Multiple Choice

Consider a simple macro model with a constant price level and demand-determined output.If the marginal propensity to spend in such a model is 0.4,the simple multiplier is

• A)0.
• B)0.4.
• C)1.67.
• D)2.5.
• E)4.0.

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Definitions:

Intrinsic Worth

This refers to the inherent value that an entity has, independent of its utility or benefit to others.

Means to End

A method or action carried out for the purpose of achieving a specific goal or outcome.

Deontological

Pertaining to an ethical theory that suggests the morality of an action should be based on whether the action itself is right or wrong under a series of rules, rather than based on the consequences of the action.

Utilitarian

Pertaining to the ethical theory that the best action is the one that maximizes utility, generally defined as that which produces the greatest well-being of the greatest number of people.