Suppose the Price Level Is Constant,output Is Demand-Determined,and the Economy

question 61

Multiple Choice

Suppose the price level is constant,output is demand-determined,and the economy is closed with no government.If the saving function is S = -100 + (0.4) Y,the simple multiplier is

• A)0.2.
• B)1.
• C)2.5.
• D)5.
• E)Insufficient information to know.

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Definitions:

Monopolistically Competitive

A market structure where many firms sell products that are similar but not identical, allowing for slight differentiation and some price control.

Elasticity

A measure of the responsiveness of quantity demanded or quantity supplied to a change in one of its determinants.

Signaling Theory

A concept that suggests that individuals send signals about their qualities or intentions through their actions or investments, which others then interpret to make decisions.

Brand Names

The distinctive titles given to products or services by companies to identify and differentiate them from competitors' offerings.