Tia earned $400 extra last month. She spent $200 of it on a new television. She saved the rest of the money. What is her marginal propensity to consume in this case?
a. 0.10
b. 0.50
c. 0.75
d. 2.0
b. 0.50
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Changes in relative prices occur when
A) all prices move together. B) all exchange rates move together. C) product prices change at different rates. D) exchange rate appreciation is greater than price appreciation.
Which of the following is the purpose of a minimum wage?
a. To reduce the wage rates of high-income workers b. To keep a track of the changes in the wage rate in an unskilled labor market c. To deal with the problem of unemployment in the market d. To help increase the profits earned by the producers e. To raise the wage rate for the lowest income workers
Which of the following are not methods of dealing with externalities?
a. relying on voluntary compliance b. creating new property forms c. taxing the output of industries that pollute d. creating legal environmental standards e. increasing public spending on cleanup/reduction
Which of the following indicates the primary mechanism by which the money supply expands?
a. The U.S. Treasury prints additional currency. b. The Fed purchases additional bonds, which increases the reserves available to the banking system. c. The public decides to hold more currency rather than checking deposits. d. The U.S. government purchases additional gold.