In the savings function S = -725 + 0.25y, 0.25 is the
A) MPS. B) slope of the consumption function.
C) MPC. D) vertical intercept of the savings function.
A
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Subprime mortgages are
A) mortgages issued to borrowers who fail to document that their incomes are high enough to afford their mortgages. B) mortgages issued to borrowers with flawed credit histories. C) mortgages which are bundled together by financial institutions and sold to investors. D) government-backed mortgages issued by Fannie Mae and Freddie Mac.
If economists forecast an increase in aggregate expenditure, which of the following is likely to occur?
A) GDP will fall. B) Wages will fall. C) Inventories will rise. D) GDP will rise.
The slope of the budget line in the graph shown:
A. represents the opportunity cost of the two goods relative to each other.
B. represents the relative marginal utilities from consuming the two goods.
C. measures the total utility the consumer gets from consuming the two goods.
D. is the consumer’s income level.
Which statement concerning monopolistic competition is false?
A. The monopolistically competitive demand curve is more elastic than the demand curve facing a monopolistic firm. B. Monopolistic competition is likely to result in a greater variety of product brands than pure competition. C. Monopolistic competition does not lead to any economic inefficiency since firms in this industry cannot sustain economic profits. D. Long-run equilibrium under monopolistic competition is achieved where economic profits are zero.