Consider a Model in Which Output Is Demand- Determined

question 28

Multiple Choice

Consider a model in which output is demand- determined. If the marginal propensity to spend out of national income is 0.4, then a $0.6 billion decrease in government purchases will cause equilibrium national income to by approximately .

• A)decrease; $0.24 billion
• B)increase; $1.00 billion
• C)decrease; $1.50 billion
• D)decrease; $1.00 billion
• E)increase; $1.50 billion

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Definitions:

Months

Units of time in calendars that approximately correspond to one cycle of the moon's phases, used to measure durations and organize schedules.

Age

A measure of the time an individual has lived, typically expressed in years.

Universal Grammar

is a theory in linguistics proposing that the ability to acquire language is innate to humans and that all languages share a common underlying structure.

Basic Grammar

The foundational rules and principles that govern the structure of sentences in a language.