The marginal propensity to save is the change in saving divided by the change in:
a. Consumption
b. Investment
c. Income
d. Debt
c. Income
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A shoe salesman working on commission must decide whether to work hard or shirk. Working hard would increase the probability of a sale from 20% to 70% but the effort would cost him $5 . If the commission on a typical pair of shoes was $12, would he decide to work hard?
a. Yes because it is higher than what it costs him in effort b. Yes because it is higher than zero c. No, because it costs him more in effort d. None of the above
What is measured on the horizontal axis of the aggregate demand/aggregate supply model?
A. prices B. nominal income C. real Gross Domestic Product (GDP) D. planned expenditures
The Phillips Curve will shift downward if
A. the overall employment rate remains unchanged. B. the expected inflation rate falls. C. the unexpected inflation rate rises. D. the price level falls.
The productivity of workers in an economy is high if:
A) the economy has a negative rate of inflation. B) the economy has low capital stock. C) the economy has high levels of human capital. D) the economy has a large working age population.