The Order for the Chain of Events for the Keynesian

question 21

Multiple Choice

The order for the chain of events for the Keynesian model is for a change in ________ to lead to a change in ________,which is then multiplied resulting in a change in ________.

• A) investment; animal spirits; the price level
• B) business confidence; investment; real GDP
• C) the Fed's intermediate targets; the Fed's goals; real GDP
• D) real GDP; income; consumption

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Definitions:

Administrative Expenses

Costs related to the general administration of a business, such as salaries of executive personnel, accounting, and human resources.

Net Operating Income

A measure of a company's profitability calculated as total revenue minus operating expenses, excluding interest and taxes.

Contribution Approach

A method of income statement presentation that separates fixed costs from variable costs, facilitating operational decision-making.

Cost Formula

An equation used to predict costs at different levels of activity. It often incorporates fixed costs, variable rate per unit of activity, and the total cost.