Consider a Simple Macro Model with a Constant Price Level

question 47

Multiple Choice

Consider a simple macro model with a constant price level and demand-determined output.If the simple multiplier is 3 and there is a $2 million increase in autonomous investment spending,then the equilibrium level of income will increase by

• A)$1.2 million.
• B)$2 million
• C)$3 million.
• D)$4.5 million.
• E)$6 million.

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