If the consumption function is C = 90 + 0.75y, then the marginal propensity to save is
A) 0.25. B) 0.75. C) 67.5. D) 90.
A
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Refer to Figure 10-3. Which of the following is consistent with the graph depicted above?
A) The government runs a budget deficit. B) An expected recession decreases the profitability of new investment. C) Taxes are changed so that real interest income is taxed rather than nominal interest income. D) Technological change increases the profitability of new investment.
When a firm leaves a perfectly competitive industry,
A. the individual demand curves facing remaining firms shift toward the point of minimum average cost in the long run. B. short-run industry equilibrium is reestablished at a new point along the original short-run industry supply curve. C. the short-run industry supply curve shifts to the right. D. at the new long-run equilibrium, the remaining firms in the industry will each receive a higher profit.
An "increase in the quantity demanded" means that
A) the demand curve has shifted to the right. B) the supply curve has shifted to the left. C) price has declined and consumers therefore want to purchase more of the good. D) given supply, the price of the good can be expected to rise.
The father of general equilibrium theory is considered to be:
A. Kenneth Arrow. B. Gerard Debreu. C. Leon Walras. D. John Nash.