In the Simple Aggregate Expenditure Model Where All Components of Aggregate

question 88

Multiple Choice

In the simple aggregate expenditure model where all components of aggregate expenditure are autonomous except consumption, what is the value of the multiplier if the marginal propensity to consume is 0.75?

• A) 1
• B) 4
• C) 5
• D) infinity

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Definitions:

Flexible Behavior

The ability to adapt actions and strategies in response to changing circumstances and environments.

Evolved

Underwent gradual development or change over a period of time, often in response to environmental pressures or for survival advantages.

Intelligence

The ability to learn from experience, solve problems, and use knowledge to adapt to new situations.

Heritability

The proportion of variation among individuals that we can attribute to genes. This differs from one trait to another and can be influenced by the environment.