Consider a Simple Macro Model with a Constant Price Level

question 119

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 0.4,the simple multiplier is

• A)0.
• B)0.4.
• C)1.67.
• D)2.5.
• E)4.0.

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Definitions:

Contribution Percentages

The portion of sales revenue that is not consumed by variable costs, indicating how much contributes to covering fixed costs and generating profits.

Departmental Contributions

The specific financial or operational impact of individual departments within a company toward its overall success.

Uncontrollable Expenses

Uncontrollable expenses are costs that cannot be changed or influenced in the short term by the actions of managers or individuals within the organization.

Joint Cost

A cost that is incurred in producing multiple products where the costs cannot be easily separated for each product produced.