Consider a Simple Macro Model with a Constant Price Level

question 110

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 0.8,the simple multiplier is

• A)0.
• B)0.8.
• C)1.25.
• D)5.0.
• E)8.0.

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Definitions:

Number of Days

Often refers to the time period used in finance and accounting to calculate interest, production times, or deadlines.

Balance Sheet Approach

A method focusing on a company's balance sheet to assess its financial condition by analyzing assets, liabilities, and equity at a specific point in time.

Allowance Account

A contra-asset account used to estimate future uncollectible debts from customers, reducing the total amount of outstanding receivables.

Gross Accounts Receivable

The total amount of money owed to a company by its customers before deducting any allowance for doubtful accounts.