Suppose a market basket of goods and services costs $400 in the base year and the consumer price index (CPI) is currently 125. This indicates the price of the market basket of goods is now:
A. $275.
B. $425.
C. $500.
D. $525.
Answer: C
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At equilibrium income:
a. planned and actual expenditure are equal. b. GDP will remained unchanged until an exogenous shock occurs. c. unplanned inventories are equal to zero. d. all of the above.
Bob has heard rumors that his employer will be merging with another firm and many employees may lose their jobs, and he wants to be prepared in case he loses his job. If he begins to save more in response to this rumor, it is a ________ reason for saving.
A. life-cycle B. public C. precautionary D. private
The Latin expression Ceteris paribus means:
A. everything else being equal. B. economic model. C. economists are partly right. D. partial scarcity is certain.
The marginal propensity to consume can be found by dividing
A. Disposable income by total consumption. B. The change in total consumption by the change in disposable income. C. Total consumption by total saving. D. Total consumption by the number of people consuming.