Consider a Simple Macro Model with Demand- Determined Output

question 10

Multiple Choice

Consider a simple macro model with demand- determined output. If z is the marginal propensity to spend out of national income, Y is national income and A is autonomous expenditure, then the simple multiplier is equal to

• A)Y/(1- z).
• B)z.
• C)1 - z.
• D)1/(1- z).
• E)1/z.

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Definitions:

Need for Achievement

A motivational drive that influences individuals to achieve excellence and set challenging goals.

Individualistic Culture

Cultures in which personal achievements and independence are highly valued, emphasizing the importance of individual goals over group goals.

Belief Perseverance

The phenomenon where individuals maintain their beliefs even in the face of contradictory evidence.

Fundamental Attribution Error

The tendency to overemphasize personal characteristics and ignore situational factors in explaining others' behavior.