1. In the circular flow model, a state of equilibrium is reached when: A) savings are equal to investment. B) government spending is equal to taxation. C) imports are equal to exports. D) total injections are equal to total withdrawals. E) production is equal to expenditure is equal to income.

Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
Section: Chapter Questions
Problem 1.1DQ
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1. In the circular flow model, a state of equilibrium is reached when:
A) savings are equal to investment.
B) government spending is equal to taxation.
C) imports are equal to exports.
D) total injections are equal to total withdrawals.
E) production is equal to expenditure is equal to income.
2. If autonomous expenditure remains constant, and there is a decrease in the
proportion of aggregate disposable income consumed in the
economy,
then....
A) equilibrium income will be reduced and the multiplier will be increased.
B) equilibrium income will be increased. and the multiplier will be increased.
C) equilibrium income will be reduced and the multiplier will be reduced.
D) equilibrium income will be increased and the multiplier will be reduced.
E) equilibrium income will be increased and the multiplier will remain unchanged.
Transcribed Image Text:1. In the circular flow model, a state of equilibrium is reached when: A) savings are equal to investment. B) government spending is equal to taxation. C) imports are equal to exports. D) total injections are equal to total withdrawals. E) production is equal to expenditure is equal to income. 2. If autonomous expenditure remains constant, and there is a decrease in the proportion of aggregate disposable income consumed in the economy, then.... A) equilibrium income will be reduced and the multiplier will be increased. B) equilibrium income will be increased. and the multiplier will be increased. C) equilibrium income will be reduced and the multiplier will be reduced. D) equilibrium income will be increased and the multiplier will be reduced. E) equilibrium income will be increased and the multiplier will remain unchanged.
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