Consumption is C = C + cY,where C = 50 and c = 0.55, investment function is I = I + dY, where I = 25 and d = 0

4. What is the constant term in the aggregate demand function: (a) 75; (b) 50; (c) 25; (d)


100.75;


5. What is the slope of the aggregate demand function: (a) 0.2; (b) 0.55; (c) 75; (d) 0.75;


6. What is the equilibrium level of income: (a) 200; (b) 300; (c) 400; (d) 500;


Increase autonomous consumption by 10.


7. What is the constant term in the consumption function: (a) 40; (b) 50.55; (c) 60; (d) 70;


8. What is the slope of the consumption function: (a) 0.55; (b) 0.75; (c) 0.2; (d) 0;


9. What is the new level of equilibrium income: (a) 340; (b) 400; (c) 50; (d) 75;


10. What is the multiplier: (a) 1; (b) 0.75; (c) 4; (d) 2;


11. Why is the multiplier not equal to 1/(1−c): (a) The multiplier is always less than 1/(1-


c); (b) It is equal to 1/(1-c); (c) interest rates have risen; (d) investment is also influenced


by the level of income;

Consumption is C = C + cY,where C = 50 and c = 0.55, investment function is I = I + dY, where I = 25 and d = 0
4.... the constant term in the aggregate demand function: (b) 50;





5... the slope of the aggregate demand function: (b) 0.55;


6. What is the equilibrium level of income: (a) 200; (b) 300; (c) 400; (d) 500;


None of the alternatves are correct. The correct equilibrium income is 166.67 or you have missed giving some data correctly.


Increase autonomous consumption by 10.


7.... the constant term in the consumption function: (a) (c) 60;


8.... the slope of the consumption function:(a).55;


9. What is the new level of equilibrium income: (a) 340; (b) 400; (c) 50; (d) 75; None of the alternatives are correct. The correct answer is 187.78 or you have missed giving data correctly.


10. What is the multiplier: (a) 1; (b) 0.75; (c) 4; (d) 2;None of the alternatives is correct. The correct multiplier is 2..2 r so.


11. Why is the multiplier not equal to 1/(1−c): (b) It is equal to 1/(1-c);


{ there is something wrong in the question or I could not see the trick.. There uis no G is ok. But why the investment function has a income dependent component with d= 0 which means it is not dependent on income.