Suppose Aggregate Output Is Demand- Determined

question 89

Multiple Choice

Suppose aggregate output is demand- determined. The simple multiplier will increase as a result of

• A)a decrease in the marginal propensity to consume.
• B)an increase in investment.
• C)an increase in autonomous consumption.
• D)an increase in the marginal propensity to consume.
• E)a decrease in autonomous consumption.

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Definitions:

Interest Rates

The cost of borrowing money or the return on invested funds, typically expressed as a percentage of the principal amount per year.

User Cost

The cost associated with the use of a product or service, including purchase cost, maintenance, and operating expenses, as well as opportunity costs.

Extraction Cost

The expenses associated with the removal of raw materials or resources from their natural setting, which can include labor, equipment, and operational costs.

User Cost

The cost associated with using a capital asset, considering both the depreciation of the asset and the foregone interest that could have been earned by investing funds elsewhere.