The marginal propensity to consume (mpc) is the:
A. percentage by which disposable income increases when consumption increases by 1 percent.
B. amount by which disposable income increases when consumption increases by $1.
C. percentage by which consumption increases when disposable income increases by 1 percent.
D. amount by which consumption increases when disposable income increases by $1.
Answer: D
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Suppose the Fed conducts an open market operation in which it buys government securities from a commercial bank. Why is there a multiplier effect on the quantity of money?
What will be an ideal response?
The text shows that income elasticity for books is 1.44 . This means that
a. books are income inelastic b. books are price inelastic c. there's a 144 percent increase in book sales when income rises 10 percent d. there's a 44 percent increase in book sales when income rises 10 percent e. there's a 1.44 percent increase in book sales when income rises 1 percent
Juanita is trying to convince the owner of a jewelry store to hire her. She argues that she could help the shop sell an additional three rings per day for a profit of $20 each. If the facts are not in dispute, but the owner does not hire her, then
a. the wage rate must be less than $60 per day. b. hiring Juanita would involve a negative marginal product. c. the wage rate must be more than $60 per day. d. the wage rate must be less than $20 per day.
Answer the following statement(s) true (T) or false (F)
1. Economist rarely have opinions or make value judgments. 2. Many controversies in economics revolve around policy considerations that contain both positive analysis and normative analysis. 3. Positive analysis can tell us whether a policy should be implemented. 4. Disagreements happen much more often in economics than in other fields.