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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Definitions:

Perceived Inequity

The feeling or belief that fairness has not been maintained in social exchanges or distribution of resources.

Change Outcomes

The process of influencing or altering the results or consequences of actions to achieve a desired goal.

Change Hierarchy

An organizational or systematic way of prioritizing alterations or amendments in processes, behaviors, or structures within a group or system.

Investing More Effort

The action of dedicating additional energy and resources towards achieving a task or goal.