Consider a Simple Macro Model with a Constant Price Level

question 31

Multiple Choice

Consider a simple macro model with a constant price level.If the AE function is horizontal,then we know the simple multiplier is

• A)less than zero.
• B)zero.
• C)between zero and one.
• D)exactly one.
• E)greater than one.

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Definitions:

External Cues

External signals or triggers that can influence behavior and decision-making.

James-Lange Theory

A theory of emotion proposing that emotions occur as a result of physiological reactions to events.

Cannon-Bard Theory

A theory of emotion that posits emotions and physiological reactions occur simultaneously and independently.

Schachter Two-factor Theory

A psychological theory which proposes that emotions are comprised of two factors: physiological arousal and cognitive label.