In Figure 3-5 above, the saving function is
A) 100 + 0.8(Y - T).
B) -100 + 0.05(Y - T).
C) 0.2Y - 100.
D) 100 + Y - T.
B
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Michael decides to hire some additional workers for his roofing company. The equilibrium wage is $17 per hour. Efficiency wage theory suggests that it is reasonable for Michael to offer
a. $17 per hour. b. less than $17 per hour because some people would be willing to work for less. c. less than $17 an hour to prevent shirking. d. more than $17 per hour in order to attract a better pool of applicants.
The price consumers pay for a product in a perfectly competitive market is an inaccurate reflection of opportunity cost.
Answer the following statement true (T) or false (F)
Suppose that in the market for paper, demand is p = 100 - Q. The private marginal cost is MCp = 10 + Q. Pollution generated during the production process creates external marginal harm equal to MCe = Q. What specific tax would result in a competitive market producing the socially optimal quantity of paper?
What will be an ideal response?
Define the multiplier. How is it related to real GDP and the initial change in spending? How can the multiplier have a negative effect?
What will be an ideal response?