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Consider the Simplest Macro Model with Demand-Determined Output

question 114

Multiple Choice

Consider the simplest macro model with demand-determined output.Suppose an increase in business confidence leads firms to increase investment in new equipment by $3.5 billion.The marginal propensity to spend in this economy is 0.6.What is the eventual total new expenditure in this economy due to the increase in investment?


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Normative Study

An investigation or research aimed at understanding what is considered normal or typical behavior or characteristics in a specific population.

Consumer Behavior

The study of how individual consumers, groups, or organizations select, buy, use, and dispose goods, services, ideas, or experiences to satisfy their needs and desires.

Experimental Study

A research methodology that involves the manipulation of variables to observe and measure their effects on a subject group.

Need for Cognition

A personality trait that indicates the level of enjoyment a person gets from engaging in and solving challenging mental activities.

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