Suppose when real disposable income is $5000, planned real consumption is $4000. When real disposable income increases to $6000, planned real saving increases by $500. The new planned real consumption expenditures is
A. $5,000.
B. $3,500.
C. $6,000.
D. $4,500.
Answer: D
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What is the difference between perfect competition and monopolistic competition?
A) Perfect competition has a large number of small firms while monopolistic competition does not. B) Perfect competition has barriers to entry while monopolistic competition does not. C) Perfect competition has no barriers to entry, while monopolistic competition does. D) In perfect competition, firms produce identical goods, while in monopolistic competition, firms produce slightly different goods. E) In monopolistic competition, firms produce identical goods, while in perfect competition, firms produce slightly different goods.
The process by which banks screen potential applicants by eliminating bad risks and to obtain a pool of creditworthy borrowers is called:
A) gap analysis B) duration analysis C) credit-risk analysis D) liquidity analysis
The decreasing portion of a firm's long run average cost curve is attributable to:
a. diminishing returns to scale. b. increasing marginal cost. c. economies of scale. d. diseconomies of scale. e. constant returns to scale.
In the context of the aggregate-demand curve, the interest-rate effect refers to the idea that, when the price level increases,
a. the real value of money decreases; in turn, the real value of the dollar increases in foreign exchange markets, which decreases net exports. b. the real value of money decreases; in turn, interest rates increase, which decreases net exports. c. households increase their holdings of money; in turn, interest rates decrease, which reduces spending on investment goods. d. households increase their holdings of money; in turn, interest rates increase, which reduces spending on investment goods.