If the marginal propensity to consume is 0.5, the marginal propensity to save is 0.5.
Answer the following statement true (T) or false (F)
True
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Figure 10-3
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In Figure 10-3, both graphs (a) and (b) indicate that the economy is experiencing a(n)
A. recessionary gap of RE. B. recessionary gap of RG. C. inflationary gap of RG. D. inflationary gap of RE.
Twenty years ago a stove cost $300 and a refrigerator cost $1,500. Today a stove costs $600, while a refrigerator costs $1,800. Which of the following statements is TRUE?
A) The relative price of stoves and refrigerators has not changed. B) The relative price of a refrigerator has increased. C) The relative price of a stove has increased. D) The money price of a refrigerator has fallen.
Since 1962, which of the following federal expenditures, measured as a percentage of GDP, has increased the most?
A) Social Security B) Medicare and Medicaid C) net interest D) defense
A new toll road was built in Southern California between San Juan Capistrano and Costa Mesa. On average, drivers save 10 minutes taking this road as opposed to the old road. The toll is $2; the fine for not paying the toll is $76
The probability of catching and fining someone who does not pay the toll is 90%. Individuals who take the road and pay the toll must therefore value 10 minutes at a minimum A) between $1.80 and $68.40. B) between $2 and $68.40. C) $1.80. D) between $1.80 and $76. E) more than $76.