Suppose Aggregate Output Is Demand-Determined

question 50

Multiple Choice

Suppose aggregate output is demand-determined.Suppose a decrease in autonomous investment expenditure of $20 million reduces equilibrium national income by $50 million.The simple multiplier is equal to

• A)-2.5.
• B)-0.6.
• C)0.4.
• D)0.6.
• E)2.5.

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Definitions:

Appeal to Ignorance

A fallacy that asserts a proposition to be true because it has not been proved false or vice versa.

Atlantis

A mythical island nation mentioned in Plato's works, "Timaeus" and "Critias," as a powerful and advanced civilization that purportedly sank into the ocean in a single day and night of misfortune.

Fallacy

An error in reasoning or argumentation that leads to a conclusion being invalid or deceptive, often due to a flaw in the structure of the argument.

Equivocation

The misleading use of a term with more than one meaning or sense, causing a fallacy in argumentation due to ambiguous language.