Consider a Simple Macro Model with Demand-Determined Output

question 46

Multiple Choice

Consider a simple macro model with demand-determined output.In such a model,the larger the marginal propensity to spend,the

• A)larger the MPC.
• B)smaller the MPS.
• C)smaller the simple multiplier.
• D)larger the simple multiplier.
• E)greater is investment.

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Definitions:

Actual Price

The price at which goods or services are sold in the market, as opposed to theoretical or listed prices.

Supply-Side Market Failure

A situation where the production of a good or service does not take into account the full cost of its impact, leading to overproduction or underproduction.

Transcontinental Railway

A railroad system that crosses an entire continent, connecting distant locations and facilitating transportation and trade.

Sparks

In a general sense, sparks refer to small particles or flashes of light created by a sudden disruption or collision, often related to electricity or fire.