The slope of the consumption function
A. equals 1.
B. is horizontal.
C. equals the MPC.
D. is vertical.
Answer: C
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Your friend Harry has quit his $20,000-a-year job to start a business that rents fishing boats. He asks you to lend him $50,000 and agrees to pay you a 10% return on your $50,000 if he earns a profit
During the first year Harry's total revenue is $120,000 and his total cost for equipment and supplies are $100,000 . Harry tells you that he cannot pay you any interest this year because he did not earn a profit. Is your friend Harry trying to cheat you?
The vicious circle of poverty refers to a condition where
a. people are poor because they cannot invest in capital goods and they cannot invest in capital goods because they are poor b. people who borrow money at high interest rates can never get out from under the indebtedness created c. people invest in unprofitable projects and keep pouring loanable funds into those projects in the hope of salvaging them d. people prefer consumption goods to capital goods so there are insufficient capital goods to propel the economy out of poverty e. poverty is relative and poor people remain poor because the wealthy grow wealthier
If a larger percentage of Americans attended college, the wage premium would probably
a. continue rising. b. continue falling. c. rise. d. fall.
The Social Security Act was passed during the administration of President ______________________.
Fill in the blank(s) with the appropriate word(s).