If real disposable income increases, the average propensity to consume will
A. increase.
B. initially increase, and then decrease.
C. decrease.
D. remain constant.
Answer: C
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The laissez-faire free-market system is
A. an ideal of perfection. B. one that leaves no room for improvement. C. unmatched by any other system for allocative efficiency. D. All of the responses are correct.
In 1997–1998, which one of the following countries experienced a sharp depreciation of its currency?
a. Argentina b. Brazil c. Thailand d. Italy
If the Fed wants to limit the money supply, it should ______.
a. buy bonds b. decrease the interest rate paid on reserves c. raise the discount rate d. lower reserve requirements
The unemployment rate:
A. increases before the start of a recession. B. decreases during recessions. C. increases only after the recession has ended. D. increases during recessions.