Consider a Simple Macro Model with a Constant Price Level

question 58

Multiple Choice

Consider a simple macro model with a constant price level and demand- determined output. Using this model, if economists want to estimate the effect of a given change in desired investment on equilibrium national income, they would multiply the change in desired investment by the

• A)marginal propensity to save.
• B)equilibrium level of national income.
• C)reciprocal of the marginal propensity to spend.
• D)simple multiplier.
• E)average propensity to save.

---

Definitions:

Appropriate Terms

Relevant and suitable terms or phrases used in a particular context, especially in legal or formal documents.

Letter Code

A Letter Code is a system of symbols or characters used to represent specific information, often used for confidentiality, identification, or simplification purposes.

Insurance Policy

A contract between an individual or entity and an insurance company to provide financial protection or reimbursement against losses.

Journal Entries

Records of financial transactions in the accounting system that are used to transfer amounts from one account to another, reflecting the financial effects of business transactions.