Suppose the Price Level Is Constant,output Is Demand-Determined,and the Economy

question 152

Multiple Choice

Suppose the price level is constant,output is demand-determined,and the economy is closed with no government.If the consumption function is C = (1/2) Y,the simple multiplier is

• A)2/3.
• B)1.
• C)2.
• D)3.
• E)Insufficient information to know.

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Definitions:

Credit Sales

Sales made by a business where payment is deferred, allowing the customer to pay at a later date.

Raw Materials

the unprocessed or minimally processed resources used to manufacture finished goods, such as metals, plastics, or textiles.

Retained Earnings

Cumulative net income of a company that is retained within the business rather than distributed to shareholders as dividends.

Cost of Goods Sold

The total cost directly associated with producing goods, including materials and labor expenses, that a company sells during a specific period.