Suppose Aggregate Output Is Demand- Determined

question 85

Multiple Choice

Suppose aggregate output is demand- determined. If the simple multiplier is 4 and there is a $10 billion increase in planned investment spending, then equilibrium income will and the marginal propensity to spend must equal .

• A)increase by $40 billion; 0.75
• B)decrease by $10 billion; 0.25
• C)increase by $10 billion; 4.0
• D)increase by $40 billion; 0.25
• E)decrease by $40 billion; 0.75

---

Definitions:

Forging Process

A manufacturing process involving the shaping of metal using localized compressive forces, such as hammering or pressing.

False Alarm

An incorrect signal indicating that a certain condition or attribute has been detected when it has not.

Control Charts

Statistical tools used in quality control to monitor a process and identify when it is out of control, through the plotting of data points in time order.

Gradual Shift

A slow and steady change or movement in position, opinion, or condition over time.