The saving function shows the relationship between planned real saving and
A. the marginal propensity to save.
B. real disposable income.
C. the average propensity to save.
D. real wealth.
Answer: B
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Refer to Scenario 10.2. Suppose that in addition to the tax, a business license is required to stay in business. The license costs $1000. What happens to profit?
A) It increases by $1000. B) It decreases by $1000. C) It decreases by less than $1000. D) It stays the same.
Does history suggest that most technological progress is labor-saving or labor-augmenting?
Which of the following explains why a monetary policy in a nation with an exchange rate peg, such as Denmark, would NOT be possible?
a. The nation must keep its import tariffs in sync with the import tariffs of the nation to which it pegs. b. The nation must keep its price level and nominal interest rate equal to the price level and nominal interest rate in the nation to which it pegs. c. The nation must keep its taxes and budget deficit in sync with taxes and budget deficit in the nation to which it pegs. d. The nation is no longer able to print its own money, since it is using the currency of the nation to which it pegs.
For a given decrease in supply, the condition of demand that will result in no change in quantity is when demand is
A. perfectly inelastic. B. elastic. C. perfectly elastic. D. inelastic.