An insight into business cycles is gained by the fact that
A) changes in real GDP result in changes in autonomous expenditures.
B) at a peak, a decrease in autonomous expenditure leads to a decrease in induced expenditure.
C) autonomous expenditure does not change at either a peak or a trough.
D) at a peak, autonomous expenditure increases, thereby leading to a recession.
E) at a trough, induced expenditure decreases, thereby leading to an expansion.
B
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The vertical axis in a graph
A) is named the y-axis. B) is named the x-axis. C) is not used in a scatter diagram. D) has no origin.
Average propensity to consume
A) is the same as the break-even point. B) gives the amount a person changes planned consumption for a change in real disposable income. C) is the amount of consumption that is independent of the level of disposable income. D) is the proportion of total disposable income that is consumed.
According to the principle of rational choice, a consumer should spend money on those goods which provide the most marginal utility per dollar.
Answer the following statement true (T) or false (F)
The managerial technique of markup pricing is consistent with the economic theory of profit maximization when the markup is positively related to the price elasticity of demand
Indicate whether the statement is true or false