Consider a Simple Macro Model with a Constant Price Level

question 48

Multiple Choice

Consider a simple macro model with a constant price level and demand-determined output.The equations of the model are: C = 120 + 0.86Y,I = 300,G = 520,T = 0,X = 180,IM = 0.12Y.Equilibrium national income is

• A)2037.48.
• B)3615.24.
• C)4000.00.
• D)4307.70.
• E)8000.00.

---

Definitions:

In-Process Goods

Items that are currently in the production process but not yet completed.

External Failure Cost

Expenses incurred from products not meeting quality criteria post-delivery, encompassing returns, repairs, and warranty filings.

Quality Cost Report

A quality cost report is a financial analysis detailing the costs associated with preventing, detecting, and correcting defective work in a company.

Returns And Allowances

A reduction in sales revenue due to customers returning products or receiving allowances for defective or unsatisfactory goods.