The average propensity to consume (APC) equals
A. real disposable income divided by consumption expenditures.
B. the change in consumption expenditures divided by the change in real disposable income.
C. the change in real disposable income divided by the change in consumption expenditures.
D. consumption expenditures divided by real disposable income.
Answer: D
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Manufacturers of Weightbegone are concerned that genetic advances in weight control might reduce the demand for their diet snacks. This is an example of
a. firm-specific risk, which will likely raise shareholders' demand for higher return. b. firm-specific risk, which will likely not likely raise shareholders' demand for higher return. c. market risk, which will likely raise shareholders' demand for higher return. d. market risk, which will likely not raise shareholders' demand for higher return.
When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Increasing the transfers from workers to the unemployed counts as:
A) fiscal policy. B) monetary policy. C) neither fiscal nor monetary policy. D) both fiscal and monetary policy.
Assume that a profit maximizing monopolist is producing a quantity such that marginal revenue exceeds marginal cost. We can conclude that the
A) firm is maximizing profit. B) firm's output is smaller than the profit maximizing quantity. C) firm's output is larger than the profit maximizing quantity. D) firm's output does not maximize profit, but we cannot conclude whether the output is too large or too small.