FIGURE 22-4 -Refer to Figure 22-4.The Rotation from AE₀ to AE₁ Implies

question 132

Multiple Choice

FIGURE 22-4
-Refer to Figure 22-4.The rotation from AE₀ to AE₁ implies that the marginal propensity to spend ________ and the value of the simple multiplier ________.

• A)increases; decreases
• B)increases; increases
• C)remains the same; increases
• D)decreases; increases
• E)decreases,decreases

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Definitions:

Financial Statement

Consolidated documents that present the financial activities and condition of a business, including the balance sheet, income statement, and cash flow statement.

Balance Sheet

A financial statement that provides a snapshot of a company’s financial position at a specific point in time, listing assets, liabilities, and shareholders' equity.

Income Statement

A document detailing a firm's income and outgoings during a certain time, ending in either a profit or a deficit.

Net Income

The total profit of a company after subtracting all costs, expenses, and taxes from the total revenue.