Consider a Simple Macro Model with a Constant Price Level

question 21

Multiple Choice

Consider a simple macro model with a constant price level and demand-determined output.If the marginal propensity to spend in such a model is 0.6,the simple multiplier is

• A)0.
• B)0.6.
• C)1.67.
• D)2.5.
• E)6.0.

---

Definitions:

Endorphins

Natural chemicals produced by the body to relieve stress and pain, often leading to feelings of euphoria.

Substance P

A neuropeptide involved in the transmission of pain and other sensory information in the nervous system.

Capsaicin

A chemical compound found in chili peppers that is responsible for their pungent flavor and spicy heat, also used therapeutically for its pain-relieving properties.

Vestibular System

A complex system located within the inner ear that helps maintain balance and spatial orientation.