The marginal propensity to consume (MPC) in exhibit 10-2 equals

What will be an ideal response?


0.80 or 4/5

Economics

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Jane has noticed that she used to pay $2 for coffee and now she pays $2.50. Which of the following statements is TRUE?

A) The relative price of coffee has increased compared to tea. B) The money price of coffee has increased. C) The law of supply explains why the price of coffee has increased. D) Jane will stop consuming coffee.

Economics

The existence of the underground economy causes gross domestic product (GDP) statistics to _____

a. understate the true volume of economic activity b. overstate the aggregate price level in the economy c. overstate the standard of living d. overstate the profit of firms e. understate government spending in an economy

Economics

A consequence of an inflationary gap is ____ as output begins to decrease and prices continue to increase.

A. stagflation B. reflation C. disinflation D. perflation

Economics

A farmer buys a new tractor from John Deere to use on her cotton farm. This tractor is included in GDP as

A. a durable consumption good. B. part of gross private domestic investment. C. a nondurable consumption good. D. a service.

Economics