In a Simple Macro Model with Demand-Determined Output,the Equilibrium Level

question 135

Multiple Choice

In a simple macro model with demand-determined output,the equilibrium level of national income is at an income

• A)to the left of the point where the AE curve intersects the 45-degree line.
• B)where the AE curve intersects the 45-degree line.
• C)to the right of the point where the AE curve intersects the 45-degree line.
• D)where saving equals consumption.
• E)where saving equals income.

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Definitions:

Well-founded Predictions

Predictions based on solid data, thorough analysis, and plausible assumptions about future events or outcomes.

New Hypotheses

Newly formulated propositions made as bases for further investigation to prove or disprove them through empirical evidence.

Testable Hypothesis

One that can be shown to be false by reference to empirical evidence.