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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