Suppose when real disposable income is $5000, planned real consumption is $4000. When real disposable income increases to $6000, planned real saving increases by $500. The new planned real consumption expenditures is
A) $5,000.
B) $4,500.
C) $6,000.
D) $3,500.
B
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From 1900 to 1960, Latin America's real GDP grew
A) slower than Europe, Asia, and the U.S. B) as fast or faster than Europe, Asia, and the U.S. C) faster than Europe and the U.S. but slower than Asia. D) faster than Asia, but slower than Europe and the U.S.
On August 5, 2003, a tragic fire destroyed a large Jim Beam whiskey factory in Kentucky. Assume that the U.S. market for whiskey is perfectly competitive, and that the market was originally in long run equilibrium. What would be the effects of such an incident?
a. An increase in supply would cause a reduction in price, which would then lead to entry of firms. b. A decrease in supply would cause an increase in price, which would then lead to entry of firms.` c. An increase in supply would cause an increase in price, which would then lead to entry of firms d. A decrease in supply would cause an increase in price, which would then lead to exit of firms. e. Price of the whiskey would remain unchanged and the existing firms would continue to earn zero economic profit.
In general, the IMF provides developing countries with:
A. loans and lets these countries decide how the loans will be used. B. technical advice but does not provide them with loans. C. loans, but only if the government adopts certain policies specified by the IMF in return. D. neither loans nor technical advice.
Analysis indicates that the economy is in a recessionary gap. Which of the following is the most appropriate policy mix in this situation?
A. A budget surplus and expansionary monetary policy B. A budget deficit and expansionary monetary policy C. A budget deficit and contractionary monetary policy D. A budget surplus and contractionary monetary policy