In the Simple Keynesian Model, If Desired Investment Is Greater

question 132

Multiple Choice

In the simple Keynesian model, if desired investment is greater than desired saving

• A) the multiplier effect will move the economy to a lower income level.
• B) income and output will rise.
• C) the interest rate will fall.
• D) actual saving will fall as the economy moves to a lower output level.

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Definitions:

Grouping

The process of organizing objects or numbers into sets or categories based on shared properties.

Area Model

An area model is a visual representation that uses rectangles to depict the multiplication of large numbers or algebraic expressions, aiding in the understanding of complex concepts.

Common Binomial Factor

A binomial that is a factor common to two or more polynomials.

Negative Real Number

A real number that is less than zero.