Suppose Aggregate Output Is Demand- Determined

question 31

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

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Definitions:

Temporal Lobes

Regions of the cerebral cortex located beneath the temples, important for processing auditory information and for memory and speech.

Sense of Hearing

The ability to perceive sound by detecting vibrations through the ear.

Parietal Lobe

The part of the brain located behind the frontal lobe, responsible for processing sensory information regarding the location of parts of the body as well as interpreting visual information and processing language and mathematics.

Art Museum

A public or private institution that collects, conserves, and exhibits works of art for education, study, and enjoyment of the public.