Suppose Aggregate Output Is Demand-Determined

question 104

Multiple Choice

Suppose aggregate output is demand-determined.If the business community decreases its planned investment expenditures by $4 billion,causing equilibrium national income to fall by $8 billion,the marginal propensity to spend must be

• A)2/5.
• B)1/2.
• C)2/3.
• D)4/5.
• E)2.