Consider a Simple Macro Model with a Constant Price Level

Multiple Choice

Consider a simple macro model with a constant price level and demand- determined output. If the simple multiplier is 3 and there is a $2 million increase in autonomous investment spending, then the equilibrium level of income will increase by

A) $6 million.
B) $3 million.
C) $4.5 million.
D) $1.2 million.
E) $2 million