Economic Theories Can Be Used to Do All of the Following

question 111

Multiple Choice

Economic theories can be used to do all of the following EXCEPT:

• A) Evaluate economic policy.
• B) Design economic policy.
• C) Explain consumer and market behavior.
• D) Determine exact economic outcomes.

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Definitions:

Aggregate Expenditure Line

A graphical representation of the total planned spending in an economy at various levels of national income.

Price Level

A measure that reflects the average prices of goods and services in an economy at a specific point in time.

Marginal Propensity

The tendency of an individual or household to spend an additional dollar of income on consuming goods and services.

Simple Spending Multiplier

The ratio of a change in output to a change in autonomous spending that caused it, illustrating the impact of fiscal policy on total economic output.