Let "C = Ca + by" define the consumption function. The term "b" is known as
A) autonomous consumption. B) induced consumption.
C) the marginal propensity to save. D) the marginal propensity to consume.
D
You might also like to view...
At $6 per steak, consumers are willing to buy two steaks. At a price of $2, consumers are willing to buy six steaks. The elasticity of the market demand curve between P = $6 and P = $2 (dropping all minus signs) is
A. 0.33. B. 1 C. 2 D. 4
Workers and firms are currently expecting the price level to increase from 110 to 114. The Federal Reserve then announces that it will be reducing the growth rate of the money supply
If the Fed's announcement is credible, and firms and workers have rational expectations, describe how the expectations of firms and workers will be affected and how the change in expectations will affect the unemployment rate.
A balance of payments crises under fixed exchange rates occurs when
A) a country runs out of foreign reserves. B) a country is in a liquidity trap. C) exports and imports expand beyond some point. D) marginal returns on foreign exchange investments approach zero. E) forward currency markets undergo high volatility.
Your company has recently requested that you travel to Dhaka, Bangladesh, to work on negotiations for a new factory to be located in one of the port cities. Your travel agent provides a list of several hundred local hotels and a Sheraton. In this case, the Sheraton brand-name is likely to be used as a signal of
a. perceived differences that are not likely to exist among your various options. b. quality when quality cannot be easily judged. c. inefficiency in markets characterized by recognizable brand names. d. the quality of general lodging accommodations in Dhaka.