Consider the simple multiplier when the price level is constant.We can say that national income is ________ and that the simple multiplier measures the horizontal shift in ________ in response to a change in autonomous desired expenditure.
A)demand determined; the AS curve
B)unit-cost determined; the AD curve
C)constant; the AD curve
D)demand determined; the AD curve
E)constant; the AE curve

Question

Quizplus · Accepted Answer

The simple multiplier, when the price level is constant, implies that national income is demand determined. It measures the horizontal shift in the Aggregate Demand (AD) curve in response to a change in autonomous desired expenditure.

Consider the Simple Multiplier When the Price Level Is Constant