In a closed economy with no taxes in which the average MPC is 0.75, which of the following is true?
A) If income is $100 the savings is $75
B) If income is #100 then consumption is $50
C) If income is $200 then saving is $50
D) If income is $200 then consumption is $75
E) If income is $500 then saving is $100
Ans: C) If income is $200 then saving is $50
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Suppose the firm's marginal cost of producing a can increases by $1 per can. Then, based on the figure above, the firm would
A) produce zero cans. B) decrease the amount of cans it produces but not to zero cans. C) not change the amount of cans it produces. D) increase the amount of cans it produces. E) More information is needed to determine what action the firm will take.
Migration of educated individuals from developing- to developed countries is referred to as the
a. survival of the fittest b. demographic transition c. disguised unemployment d. brain drain e. none of the above
Economist John Maynard Keynes is famous for saying, "In the long run, we are all dead." He is referring to the:
A. length of time it can take the economy to recover to potential GDP without policy intervention. B. permanent inflation that results in long-run adjustments. C. fact that no policy can affect the long-run equilibrium. D. notion the economy is sure to collapse in the long run.
If expected inflation is 2%, the nominal interest rate is 7% and the economy is growing at a rate of 3%, the real interest rate is equal to
What will be an ideal response?