Consider a Simple Macro Model with Demand-Determined Output

Multiple Choice

Consider a simple macro model with demand-determined output.Which of the following parameters will produce the most stable real GDP in the face of autonomous expenditure shocks?

A) MPC = 0.8,t = 0.2,m = 0.3
B) MPC = 0.7,t = 0.3,m = 0.2
C) MPC = 0.7,t = 0.1,m = 0.4
D) MPC = 0.9,t = 0.2,m = 0.4
E) MPC = 0.8,t = 0.1,m = 0.2