The consumption function shows the relationship between planned real consumption spending and
A. the average propensity to consume.
B. real disposable income.
C. the marginal propensity to consume.
D. planned real saving.
Answer: B
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If the consumption of a good by one person reduces the amount of it that can be consumed by others, the good is
A. excludable. B. nonexcludable. C. rivalrous in consumption. D. nonrivalrous in consumption.
Which of the following combinations would unambiguously increase the supply of money? a. The Fed pays a higher interest rate on bank reserves and increases the required reserve ratio
b. The Fed conducts an open market purchase of government securities and raises the discount rate. c. The Fed pays a higher interest rate on bank reserves and conducts an open market purchase of government securities. d. All of the above would produce conflicting effects on the supply of money
A tit-for-tat strategy in a two-firm balanced oligopoly results in
a. A Nash equilibrium b. one firm setting price and announcing that it would match whatever price its rival firm charges c. both firms competing as if the market were perfectly competitive d. both firms colluding to set and maintain relatively high prices e. one firms punishing its rival for setting price above its own
The set of fiscal policies that would be most contractionary would be a(n)
A. decrease in government purchases and an increase in taxes. B. increase in government purchases and a decrease in taxes. C. increase in government purchases and taxes. D. decrease in government purchases and taxes.