Consider a Simple Macro-Model with Demand-Determined Output

question 14

Multiple Choice

Consider a simple macro-model with demand-determined output.An exogenous increase in the domestic price level will ________ the real value of the private sector's wealth,which leads to ________ in autonomous consumption and thus ________ shift in the AE function.

• A)increase; a decrease; a downward
• B)increase; an increase; a downward
• C)increase; an increase; an upward
• D)reduce; a decrease; a downward
• E)reduce; an increase; an upward

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Definitions:

Minimax Principles

Strategy in decision-making that minimizes the maximum possible loss or maximizes the minimum gain.

Comparison Level

An individual's standard or benchmark for evaluating the attractiveness and satisfaction of a relationship, based on past experiences.

Comparison Level For Alternatives

A standard by which an individual evaluates the attractiveness of alternative groups or relationships based on past experiences or expectations.

Similarity Principle

The similarity principle posits that individuals are more likely to form and maintain relationships with others who are similar to them in various aspects.