When All the Factors of Aggregate Expenditure Are Influenced by Income

question 2

Multiple Choice

When all the factors of aggregate expenditure are influenced by income, the multiplier becomes a function of the:

• A)​marginal propensity of government purchases.
• B)​marginal propensity to consume out of disposable income.
• C)​marginal propensity of aggregate expenditure.
• D)​marginal propensity to import.

---

Definitions:

Replacement

The act of substituting a person or thing with another person or thing that serves the same purpose or function.

Restitution

The act of compensating for loss, damage, or injury; in legal contexts, it often refers to returning the victim to their original position before the harm occurred.

Quasi Contract

A legal concept where a court enforces an obligation between two parties who have not agreed to an actual contract, to prevent one party from being unjustly enriched.

Oral Contracts

Agreements between parties that are made verbally and not memorialized in writing, yet are still legally binding in many cases.