If Investment Increases by $150 And, in Response, Equilibrium Expenditure

question 332

Multiple Choice

If investment increases by $150 and, in response, equilibrium expenditure rises by $600

• A) the multiplier is 0.25.
• B) the multiplier is 4.0.
• C) the MPC is 4.
• D) the slope of the AE curve is 3.0.

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Definitions:

Cost of Goods Manufactured

The total cost of materials, labor, and manufacturing overhead used to produce goods over a specific period.

Cost of Goods Sold

The expenses directly tied to the manufacture of products sold by a business, encompassing both materials and wages.

Finished Goods Inventory

Finished goods inventory refers to the stock of completed products ready for sale at the end of an accounting period.

Cost of Goods Manufactured

The total production cost of goods that are completed during a specific period.