Because consumption is largely determined by ________ income, consumption is ________ equally distributed than current income.
a. permanent, more
b. permanent, less
c. transitory, less
d. transitory, more
Answer: a. permanent, more
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Briefly explain the command-and-control approach in dealing with an externality such as pollution. Give an example of the U.S. government using the command-and-control approach to deal with the pollution problem
What will be an ideal response?
The aggregate expenditures function:
a. has the same slope as the aggregate demand curve. b. is the key determinant of equilibrium real GDP in a fixed-price model. c. is negatively related to household consumption. d. is negatively related to net exports. e. is equal to C+I+G-X.
The short-run macro model
a. is an attempt to explain why the economy tends to perform better in the short run than in the long run b. was developed during the Great Depression to explain the economy's continuing poor performance c. lost its popularity during the 1950s d. was developed during the early 19th century e. explains the forces that work to drive the economy to full employment
Refer to the above table. If the consumer's equilibrium consists of 3 movies and 6 apple pies, then we know that
A. the price of a movie download is 6 times more than the price of an apple pie. B. the price of a movie download is 4.5 times more than the price of an apple pie. C. the price of an apple pie is 3 times more than the price of a movie download. D. the price of an apple pie is 2 times more than the price of a movie download.