If consumption increases by $9 when disposable income increases by $10, the marginal propensity to consume (mpc) equals:
A. 0.1.
B. 1.0.
C. 9.0.
D. 0.9.
Answer: D
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The alternative minimum tax (AMT) was created to
A. make sure that everyone had an equal chance of facing a tax audit. B. make sure that upper income taxpayers could not use deductions to avoid paying income taxes. C. make sure poor people paid at least something in taxes. D. make sure that everyone paid the same proportion of their income in taxes.
Answer the following statements true (T) or false (F)
1. All goods and services produced during the year are added to the total wealth of the nation. 2. Stocks and bonds are counted as part of total wealth. 3. To understand the purpose of a given economic policy, it is necessary to understand the influence of political and social policies. 4. Economics is an isolated science since it has no relation to other sciences.
In the following equation, what does the symbol ? denote?
AE ? C + I + G + (X – M) a. The equation is an estimate. b. The equation is absolute. c. The equation is just a suggestion. d. The equation is just a definition.
A firm's total investment in receivables depends primarily on the firm's:
A. total sales and cash discount period. B. cash to credit sales ratio. C. bad debt ratio. D.average collection period and amount of credit sales. E. amount of credit sales and cash discount percentage.