When the Economy Is in Equilibrium in the Simple Keynesian

question 269

Multiple Choice

When the economy is in equilibrium in the simple Keynesian model

• A) saving is greater than investment.
• B) investment is greater than saving.
• C) saving is equal to investment.
• D) investment is equal to consumption.

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Definitions:

Marginal Tax Rate

The tax rate that applies to the last dollar of the taxpayer's income, indicating the rate of tax on any additional income earned.

Fixed Cost

Expenses that do not change with the volume of production or sales, such as rent, salaries, and insurance.

Variable Costs

Costs that move in parallel with the rate of goods or services output.

Sensitivity Analysis

The study of how the variation in the output of a model can be attributed to different variations in the inputs of the model, used to predict the impact of changes in economic variables.