The slope of the consumption function reflects the
a. average propensity to consume
b. the ratio of income to consumption
c. marginal propensity to consume
d. level of autonomous consumption
e. level of income
C
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In the traditional Keynesian model, an income tax cut raises real GDP because
A) consumption spending depends positively on after-tax income. B) of the crowding-out effects of taxes. C) consumption spending depends negatively on after-tax income. D) consumption spending is not related to after-tax income.
If the nominal interest rate is 8 percent and the current inflation rate is 3 percent, approximately what is the real interest rate?
A) 11 percent B) 8 percent C) 5 percent D) 3 percent
Use the following table to calculate the unemployment rate. Select the correct answer from the options below. In millionsCivilian population270People incapable of working70People not looking for work60Employed workers133
A. 3 percent B. 7 percent C. 5 percent D. 9 percent
As it applies to insurance, the moral hazard problem is the tendency for:
A. those most likely to collect on insurance to buy it. B. those who buy insurance to take less precaution in avoiding the insured risk. C. sellers to price discriminate. D. sellers to restrict output and charge high prices.