The "life cycle" hypothesis sates that
a. MPC remains constant as national income rises
b. MPC varies with age
c. transitory income determines consumption
d. MPC varies with permanent income
e. consumption spending is independent of income
B
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If the Fed wishes to increase nominal interest rates, it must engage in an open market ________ of bonds that ________ the money supply.
A. sale; does not change B. sale; increases C. sale; decreases D. purchase; increases
When the percentage change in price is greater than the corresponding change in quantity demanded, demand is inelastic
Indicate whether the statement is true or false
If a firm can borrow or lend at a 6 percent annual interest rate, it will
a. buy more capital if it has the funds on hand than if it has to borrow them b. ignore the market rate of interest when making capital investment decisions c. buy less capital if it has the funds on hand than if it has to borrow them d. ignore the market rate of interest when making saving decisions e. buy the same amount of capital whether it has the funds on hand or has to borrow them
If you worked 35 hours a week at a minimum wage job you could ________ a family of four above the poverty line.
A. easily keep B. barely keep C. not come close to keeping