Which of the Following Statements Must Be True in the Simple

question 98

Multiple Choice

Which of the following statements must be true in the simple macro model (with a closed economy and no government) ?

• A)APC increases as income rises.
• B)APS decreases as income rises.
• C)MPS and MPC are both negative.
• D)MPC is negative below a certain level of income.
• E)The sum of MPC and MPS is one.

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Definitions:

Mnemonic Device

A mnemonic device is a technique used to aid memory recall through patterns, rhymes, acronyms, or visualizations.

Sensory Memory

The capacity to maintain sensory information impressions after the initial stimuli are no longer present, representing the memory's most brief-term component.

Meaningful Information

Data or details that hold significance, relevance, or value to an individual, aiding understanding and decision-making processes.

Semantic Memory

A type of long-term memory involving the capacity to recall words, concepts, or numbers, which is essential for the understanding and use of language.