Consider the Simplest Macro Model with Demand-Determined Output

question 22

Multiple Choice

Consider the simplest macro model with demand-determined output.The equations are: C = 150 + 0.8Yd,Yd = Y-T,I = 400,G = 700,T = .2Y,X = 130,and IM = 0.14Y.Autonomous expenditures in this model are

• A)1120.
• B)1350.
• C)1380.
• D)2700.
• E)5400.

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Definitions:

Debt

Money owed by one party to another under an agreement to repay borrowed funds or provided goods/services.

Profit

Profit represents the financial gains obtained when the revenues generated from business activities exceed the expenses, costs, and taxes needed to sustain those activities.

Breach Contract

A failure to perform any term of a contract, written or oral, without a legitimate legal excuse, which allows the other party to seek compensation.

Reasonable Care

A legal standard requiring individuals to act with the caution and attentiveness that a prudent person would under similar circumstances.