Assume That the Economy, as Represented by the Simple Keynesian

question 218

Multiple Choice

Assume that the economy, as represented by the simple Keynesian model, is in equilibrium with income equal to $6 million and consumption spending equal to $5 million. Which of the following is correct?

• A) Investment is $1 million.
• B) There is no saving in this economy.
• C) The economy will go into disequilibrium because consumption is not equal to income.
• D) The information provided is insufficient to determine the level of investment spending.

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Definitions:

Seismic Waves

Vibrations generated by earthquakes or other seismic events, traveling through the Earth's interior and across its surface.

Crust

The outermost solid shell of a rocky planet, Earth in particular, which is chemically and mechanically distinct from the mantle below.

Mantle

The thick layer of the Earth located between the crust above and the outer core below, characterized by its solid yet plastic-like flow.

Refracted Wave

A wave that changes direction and speed as it passes from one medium to another due to differences in densities.