Suppose the price level is constant,output is demand-determined,and the economy is closed with no government.If the marginal propensity to spend is 0.7,the simple multiplier is
A)0.33.
B)0.70.
C)1.00.
D)1.42.
E)3.33.

Question

Quizplus · Accepted Answer

The simple multiplier is calculated as 1/(1 - marginal propensity to spend), which in this case is 1/(1 - 0.7) = 1/0.3 = 3.33.

Suppose the Price Level Is Constant,output Is Demand-Determined,and the Economy