The marginal propensity to consume is equal to:
a) Total spending / total consumption
b) Total consumption / total income
c) Change in consumption / change in income
d) Change in consumption / change in savings
Answer: c) Change in consumption / change in income
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A surplus is said to exist when, at prevailing prices,
A) demand is greater than supply. B) quantity supplied is greater than quantity demanded. C) scarcity is eliminated. D) supply and demand are in harmonic equilibrium.
Suppose that in 2016, all prices in the economy double and that all wages and salaries also double. In 2016 you
A) are no better off or worse off than you were in 2015 as the purchasing power of your salary has remained the same. B) are worse off than you were in 2015 as you can no longer afford to buy as many goods and services. C) are better off than you were in 2015 as your salary is higher than it was in 2015 and you can now buy more goods and services. D) cannot determine whether you are better off or worse off than you were in 2015, because the purchasing power of your salary cannot be determined.
Given the path of natural real GDP growth, economists prefer an economy such as ________, in which the real GDP gaps are ________
A) Stabilia's, minimized B) Stabilia's, maximized C) Volatilia's, minimized D) Volatilia's, maximized
In this graph, what are the coordinates for point B?
a. ATC and q*
b. ATC and 0
c. P* and q*
d. P* and 0