Consider a Simple Macro Model with Demand-Determined Output

question 138

Multiple Choice

Consider a simple macro model with demand-determined output.If z is the marginal propensity to spend out of national income,Y is national income and A is autonomous expenditure,then the simple multiplier is equal to

• A)z.
• B)1 - z.
• C)1/z.
• D)1/(1 - z).
• E)Y/(1 - z).

---

Definitions:

Market Efficiency

A concept describing the degree to which stock prices and other securities prices reflect all available, relevant information.

Stock Price

The cost of purchasing a share of a company in the stock market.

Adverse Information

information that negatively affects an investor's valuation of an investment and can include any bad news that impacts a company's predicted future performance or profits.

Air Compressor

A device that converts power into potential energy stored in compressed air, used in various applications from powering pneumatic tools to inflating tires.