If the MPC = 0.9, the multiplier would be:
A. 0.1.
B. 2.
C. 9.
D. 10.
Answer: D
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If Melanie had $200,000 of income and spent $180,000 on consumption in 2010 and had $300,000 of income and spent $240,000 on consumption in 2011: a. her APC in 2010 was 0.8. b. her APC in 2011 was 0.9. c. her MPC was 0.6
d. her MPC was 0.8.
Investment diversion is considered an obstacle to economic growth because:
a. it would be better to increase the mortality rate of the country, and thus have a higher per capita real GDP. b. investment in health care is highly appreciated by the international community. c. capital infrastructure automatically eliminates population problems. d. the investments in health care affect only the poorest, the least productive inhabitants of a country. e. there is no way for a country to build its industries without an increase in investment on infrastructure.
In recent years, more than one quarter of federal government spending went to Social Security and income security programs
a. True b. False Indicate whether the statement is true or false
Suppose Whitney is willing to pay $200 to buy a new phone. Loss aversion implies that if Whitney already had just bought the phone, you would:
A. have to pay her exactly $200 to part with it. B. not be able to get her to part with it for any amount of money. C. have to pay her less than $200 to part with it. D. have to pay her more than $200 to part with it.