Consider a Simple Macro Model with a Constant Price Level

question 127

Multiple Choice

Consider a simple macro model with a constant price level and demand-determined output.Using this model,if economists want to estimate the effect of a given change in desired investment on equilibrium national income,they would multiply the change in desired investment by the

• A)average propensity to save.
• B)marginal propensity to save.
• C)equilibrium level of national income.
• D)simple multiplier.
• E)reciprocal of the marginal propensity to spend.

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