According to the Keynesian-Cross Analysis, When There Is a Shift

question 70

Multiple Choice

According to the Keynesian-cross analysis, when there is a shift upward in the government-purchases schedule by an amount ΔG, then equilibrium income rises by:

• A)one unit.
• B)ΔG.
• C)ΔG divided by one minus the marginal propensity to consume.
• D)ΔG multiplied one plus the marginal propensity to consume.

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Definitions:

Foreign Competition

refers to the competitive pressure that domestic companies face from companies located in other countries.

Elastic Demand

A situation where the quantity demanded of a product changes significantly in response to changes in its price.

Competitive Levels

The degrees of competition within a market, characterized by the number of firms, product differentiation, and market entry or exit barriers.

Nonunion Firms

Companies where the workforce is not represented by a labor union, which may affect wage levels, benefits, and working conditions.