If the MPC is 0.5, then a $10 million increase in disposable income will increase consumption by
A) $15 million B) $5 million. C) $50 million. D) $2 million.
B
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In the figure above, if the exchange rate is equal to 1 Canadian dollar per U.S. dollar, there is a ________ of ________currency and the exchange rate will________
A) shortage; domestic; rise B) surplus; domestic; rise C) shortage; foreign; rise D) surplus; foreign; fall
In general, changes in the price level will change the:
A. real value of people's wealth and income. B. nominal value of cash balances. C. real value of consumption goods only. D. nominal value of consumption goods and the real value of durable goods.
The current international monetary system is best described as a
A) fixed exchange rate system. B) flexible exchange rate system. C) managed flexible exchange rate system. D) dollar standard. E) gold standard.
The economy of Omega operates according to Okun's law. In Omega, the actual and the natural rates of unemployment both equal 5 percent, and potential GDP equals $10 trillion. What is real GDP in Omega?
A. $9.5 trillion B. $9.0 trillion C. $10.5 trillion D. $10.0 trillion