Data on Output and Planned Aggregate Expenditure in Macroland Are

question 30

Multiple Choice

Data on output and planned aggregate expenditure in Macroland are given below:
Based on these data,the short-run equilibrium level of output is _________ and the income-expenditure multiplier equals ________.

• A) 3,000;1.0
• B) 5,000;1.2
• C) 5,000;1.5
• D) 5,000;2.0
• E) 6,000;5.0

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Definitions:

Inverted-U Theory

A hypothesis suggesting that a variable can produce effects that increase to a point after which further increases in the variable lead to a decline in the effect.

Industry Concentration Ratios

Statistical measures that express the extent to which a small number of firms dominate the total output, sales, or capacity in an industry.

R&D

Research and Development; a dedicated business or policy activity aimed at investing in new knowledge, product development, and innovation improvement.

Firm Sales

The total volume or value of all products sold by a company during a specific period.