The change in total welfare from a 10% increase in price will depend only on the elasticity of demand
Indicate whether the statement is true or false
False. The effect of a price change also depends on revenue changes.
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In the foreign exchange market, an increase in the U.S. interest rate leads to ________ in the exchange rate because the supply of dollars ________
A) a fall; decreases B) a rise; increases C) a rise; decreases D) no change; does not change E) a fall; increases
In the above table, the marginal propensity to save when disposable income changes from $1,000 to $2,000 is
A) 0.1. B) 0.2. C) 0.8. D) -0.2.
Official data may overstate the extent of poverty because
a. poverty is a relative as opposed to an absolute concept. b. it does not add "in-kind" transfers to the incomes of the poor. c. it overstates the taxes paid by the poor. d. it overestimates the amount the poor earn in the "underground economy."
In the Keynesian model, the larger the marginal propensity to consume, the:
A. larger the multiplier. B. larger the marginal propensity to save. C. higher the income level of the economy. D. smaller the change in income derived from a given change in government spending.