The consumption schedule is drawn on the assumption that as income increases, consumption will:
A. be unaffected.
B. increase absolutely but remain constant as a percentage of income.
C. increase absolutely but decline as a percentage of income.
D. increase both absolutely and as a percentage of income.
C. increase absolutely but decline as a percentage of income.
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Opportunity cost can best be defined as
A) the interest cost of financing a business loan at the bank. B) the value of all of the alternatives sacrificed. C) the value of the next-highest-ranked alternative. D) There is no real definition for opportunity cost.
Negative autocorrelation in the change of a variable implies that
A) the variable contains only negative values. B) the series is not stable. C) an increase in the variable in one period is, on average, associated with a decrease in the next. D) the data is negatively trended.
Aggregate demand is defined as the total spending
A. of all consumers, business firms, government agencies, and foreigners on final goods and services produced in the United States. B. by all consumers, business firms, government agencies, and foreigners in the United States. C. consumers, businesses, government agencies, and foreigners wish to make in one year. D. of consumers, businesses, and government agencies on final output.
For this question, assume that Y = N. Based on our understanding of the labor market model presented in Chapter 6, we know that an increase in the minimum wage will cause
A) an increase in the natural level of output. B) a reduction in the natural level of output. C) no change in the natural level of output. D) an increase in the natural level of employment.