(Advanced Analysis)Assume the Consumption Schedule for a Private Closed Economy

question 118

Multiple Choice

(Advanced analysis) Assume the consumption schedule for a private closed economy is C = 40 + .75Y,where C is consumption and Y is gross domestic product.The multiplier for this economy is:

• A) 3.
• B) 4.
• C) 5.
• D) 10.

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Definitions:

Income Statement Account

A financial account that shows the company's revenues, expenses, and net income over a specific period.

Petty Cash Transactions

Small purchases or expenditures paid using a readily available cash fund.

Cash Over and Short

An account that reports the discrepancies between the physical count of cash and the recorded amounts in a business's financial records.

Internal Control Procedures

Systems and policies put in place by a company to ensure the accuracy and integrity of financial and accounting information, prevent fraud, and comply with laws.