Suppose Aggregate Output Is Demand-Determined

question 88

Multiple Choice

Suppose aggregate output is demand-determined.If the simple multiplier is 4 and there is a $10 billion increase in planned investment spending,then equilibrium income will ________ and the marginal propensity to spend must equal ________.

• A)decrease by $40 billion; 0.75
• B)decrease by $10 billion; 0.25
• C)increase by $40 billion; 0.25
• D)increase by $40 billion; 0.75
• E)increase by $10 billion; 4.0

Assessing quality costs within a manufacturing setup.

Understanding the concept and importance of value-added activities in enhancing customer and business value.

Appreciating the relevance of life cycle budgeting and its impact on cost management and strategic financial planning.

Applying the theory of constraints and throughput accounting in operational decisions and productivity improvement.

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Definitions:

Standard Deviation

Standard deviation is a statistic that measures the dispersion or variability of a dataset relative to its mean, often used to gauge volatility.

Factor Portfolio

Factor Portfolio refers to a collection of financial assets that is constructed to have specific common characteristics, often used in factor investing.

Security Mispricing

The phenomenon when a security (stock, bond, etc.) is priced above or below its intrinsic value.

Risk-Free

Pertaining to an investment with guaranteed returns and negligible risk of financial loss.