Consider the Basic AD/AS Macro Model

question 50

Multiple Choice

Consider the basic AD/AS macro model. The simple multiplier is reflected by the

• A)downward movement along the AD curve in response to a change in autonomous expenditure.
• B)size of the rightward shift of the AD curve in response to a change in autonomous expenditure.
• C)horizontal distance between initial macroeconomic equilibrium and the new intersection of AD and AS in response to a change in autonomous expenditure.
• D)size of the downward shift of the AD curve in response to a rise in autonomous expenditure.
• E)upward movement along the AD curve in response to a change in autonomous expenditure.

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Definitions:

Net Method

An accounting practice where discounts for prompt payment are recorded and considered in the invoice price.

Premium Expense

The cost associated with purchasing an insurance policy or other financial product.

Estimated Premium Claims

The projected claims against an insurance provider that determines premium rates for policyholders.

Modified Cash Basis

A method of accounting that combines elements of both cash and accrual accounting, recording most transactions on a cash basis, but also incorporating the accrual basis for significant items.