The ratio of the change in consumption to the change in disposable income is the
A) average propensity to save. B) marginal propensity to consume.
C) average propensity to consume. D) marginal propensity to save.
B
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For an inferior good, a decrease in demand is caused by
A) a rise in income. B) a fall in income. C) a rise in price. D) a fall in price.
If young business professionals in America suddenly decide that driving German-made cars is an important status symbol, net exports will tend to ________ causing aggregate demand to ________, everything else held constant
A) fall; fall B) fall; rise C) rise; fall D) rise; rise
A flight to quality refers to a move by investors:
A. away from low-quality bonds towards high-quality bonds. B. towards securities of other countries and away from U.S. Treasuries. C. towards precious metals and away from U.S. Treasury bonds. D. away from bonds towards stocks.
Market power can cause market failure if it results in a misallocation of resources.
Answer the following statement true (T) or false (F)