When consumers are less confident about their jobs or incomes, they are more likely to
A) reduce purchases of durable goods than nondurable goods.
B) increase consumption spending and decrease investment spending.
C) reduce purchases of nondurable goods and increase purchases of durable goods.
D) increase investment spending and decrease consumption spending.
A
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Use the following graphs to answer the next question.
In the diagrams, AD1 and AS1 are the "before" curves. Assuming Q1 is full-employment output, a recession is depicted by ________.
A. panel (A) only B. panel (B) only C. panel (C) only D. panels (A) and (B)
The change in saving divided by the change in income is the
a. ratio of saving to income b. same as saving divided by income c. average propensity to save d. marginal propensity to consume e. marginal propensity to save
When equilibrium GDP is below potential GDP, jobs are
A. plentiful and unemployment is low. B. plentiful and unemployment is high. C. scarce and unemployment is high. D. scarce and unemployment is low.
Suppose option A has a lower expected value than option B. Which of the following statements is, in general, true?
A. A risk-neutral person is indifferent between options A and B. B. A risk-averse person prefers option B to option A. C. A risk-averse person prefers option A to option B. D. Insufficient information to determine.