• Assuming that there is no government spending or trade, an economy's GDP is the sum of domestic consumption C and investment I, ie. Y = C+ I • Assume that I is unaffected by GDP • Assume the consumption function is C = co + cY • In any equilibrium aggregate demand, AD must be equal to Y, GDP. Given this model, which NINE of the following statements are correct? Select one or more: The aggregate demand equation is given by AD = co + CY + I а. O b. C1 is equal to autonomous consumption O c. if c is a number between 0 and 1, and I+co >0 then the aggregate demand equation is a straight line that must intersect the 45 degree line at some point. Od. In a demand-driven economy the AD curve is a vertical line O e. In a demand-driven economy, demands is equal to supply g. In a demand-driven economy, supply creates its own demand O h. If the economy above is a demand-driven economy, then the equilibrium solution for Y is given by Y= co + C1 + 1 If the economy above is a demand-driven economy, then the equilibrium solution for Y is given by Y = m(co + 1), where m 1/(1 - c1) is the multiplier. Oi. O j. if c1 = 0.8 the multiplier is equal to 1/0.8= 1.25 O k. if c1 = 0.75 the multiplier is equal to 4 %3D O1. assume co = 100, I=50, c1=0.6. The equilibrium value of Y in a demand-driven economy is 300. O m. Assume that Y is initially 400, I is initially 100, and the multiplier is 2.5. I increases by 10%. The multiplier implies that in equilibrium Y will increase by 25%. O n. The higher is c1 the larger is the multiplier O o. If consumers attempt to save more, by reducing their autonomous consumption, in a demand-driven economy this will cause output to fall. p. If consumers attempt to save more, by reducing their autonomous consumption, in a demand-driven economy this will cause their saving ratio to rise (where the saving ratio is given by S/Y, and S=Y-C)
• Assuming that there is no government spending or trade, an economy's GDP is the sum of domestic consumption C and investment I, ie. Y = C+ I • Assume that I is unaffected by GDP • Assume the consumption function is C = co + cY • In any equilibrium aggregate demand, AD must be equal to Y, GDP. Given this model, which NINE of the following statements are correct? Select one or more: The aggregate demand equation is given by AD = co + CY + I а. O b. C1 is equal to autonomous consumption O c. if c is a number between 0 and 1, and I+co >0 then the aggregate demand equation is a straight line that must intersect the 45 degree line at some point. Od. In a demand-driven economy the AD curve is a vertical line O e. In a demand-driven economy, demands is equal to supply g. In a demand-driven economy, supply creates its own demand O h. If the economy above is a demand-driven economy, then the equilibrium solution for Y is given by Y= co + C1 + 1 If the economy above is a demand-driven economy, then the equilibrium solution for Y is given by Y = m(co + 1), where m 1/(1 - c1) is the multiplier. Oi. O j. if c1 = 0.8 the multiplier is equal to 1/0.8= 1.25 O k. if c1 = 0.75 the multiplier is equal to 4 %3D O1. assume co = 100, I=50, c1=0.6. The equilibrium value of Y in a demand-driven economy is 300. O m. Assume that Y is initially 400, I is initially 100, and the multiplier is 2.5. I increases by 10%. The multiplier implies that in equilibrium Y will increase by 25%. O n. The higher is c1 the larger is the multiplier O o. If consumers attempt to save more, by reducing their autonomous consumption, in a demand-driven economy this will cause output to fall. p. If consumers attempt to save more, by reducing their autonomous consumption, in a demand-driven economy this will cause their saving ratio to rise (where the saving ratio is given by S/Y, and S=Y-C)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
its missing sentence f. (its 9 (nine) correct sentences total )
Transcribed Image Text:• Assuming that there is no government spending or trade, an economy's GDP is the sum of domestic consumption
C and investment I, i.e. Y = C+ I
• Assume that I is unaffected by GDP
• Assume the consumption function is C = co + cY
• In any equilibrium aggregate demand, AD must be equal to Y, GDP.
Given this model, which NINE of the following statements are correct?
Select one or more:
U a.
The aggregate demand equation is given by AD =
co + C¡Y + I
O b. C1 is equal to autonomous consumption
O c. if c, is a number between 0 and 1, and I+co >0 then the aggregate demand equation is a straight line that
must intersect the 45 degree line at some point.
O d. In a demand-driven economy the AD curve is a vertical line
O e. In a demand-driven economy, demands is equal to supply
9.
In a demand-driven economy, supply creates its own demand
O h. If the economy above is a demand-driven economy, then the equilibrium solution for Y is given by Y= co +
C1 + |
Oi.
If the
economy
above is a demand-driven economy, then the equilibrium solution for Y is given by Y =
m(co + I), where m =
1/(1 - C1) is the multiplier.
O j. if c = 0.8 the multiplier is equal to 1/0.8= 1.25
O k. if c1 = 0.75 the multiplier is equal to 4
I.
assume co =100, I=50, c1=0.6. The equilibrium value of Y in a demand-driven economy is 300.
m. Assume that Y is initially 400, I is initially 100, and the multiplier is 2.5. I increases by 10%. The multiplier
implies that in equilibrium Y will increase by 25%.
n. The higher is c, the larger is the multiplier
O.
If consumers attempt to save more, by reducing their autonomous consumption, in a demand-driven
economy this will cause output to fall.
p. If consumers attempt to save more, by reducing their autonomous consumption, in a demand-driven
economy this will cause their saving ratio to rise (where the saving ratio is given by S/Y, and S=Y-C)
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