Consider a Simple Macro Model with Demand-Determined Output

question 46

Multiple Choice

Consider a simple macro model with demand-determined output.In such a model,the larger the marginal propensity to spend,the

• A)larger the MPC.
• B)smaller the MPS.
• C)smaller the simple multiplier.
• D)larger the simple multiplier.
• E)greater is investment.

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Definitions:

Multiple IRR Problem

A situation in capital budgeting where a project has more than one internal rate of return due to changing cash flow signs over the project's duration.

Normal Cash Flows

Regular inflows or outflows of cash associated with operational activities of a business within a specific period.

Modified Internal Rate of Return (MIRR)

A capital budgeting method that adjusts the internal rate of return calculation to better reflect the project's cost of capital and investment returns.

Real Internal Rate of Return

The adjusted rate of return that accounts for inflation, providing a more accurate measure of the actual purchasing power of future cash flows from an investment.