According to the life-cycle hypothesis, MPCs will
a. be relatively low for young adults, rise during middle age, and then rise again near or in retirement
b. be relatively high for young adults, fall during middle age, and then rise again near or in retirement
c. be relatively high for young adults, fall during middle age, and then fall again near or in retirement
d. be relatively low for young adults, rise during middle age, and then fall again near or in retirement
e. remain relatively constant over a person's life cycle
B
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The sum of all the income categories listed in the National Income and Product Accounts adds up to
A) gross domestic product. B) net national product. C) net domestic product at factor cost. D) disposable income after taxes. E) gross national product.
For a self-sufficient producer, the production possibilities frontier
a. is the same as the consumption possibilities frontier. b. is greater than the consumption possibilities frontier. c. is less than the consumption possibilities frontier. d. is always a straight line.
If purchasing power parity holds, the exchange rate (e) can be expressed as a function of the domestic price (P) and the foreign price (P*) as
A) e = P - P*. B) e = P* - P. C) e = P* + P. D) e = P/P*.
If countries begin to specialize according to comparative advantage, a more efficient use of resources occurs. As a result, the world output of at least one good increases, with no decrease in the output of any other good
a. True b. False