Assuming that Yd = $20,000 and C = $22,000, we would find that the average propensity to consume would be equal to
A) 0.8. B) 1.8. C) 1.1. D) 0.9.
C
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When economic profits are zero, accounting profits
A) must be positive. B) will be negative. C) will equal zero. D) could be positive, negative or zero.
For a particular good, an 8 percent increase in price causes a 4 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?
a. There are many close substitutes for this good. b. The good is a luxury. c. The market for the good is broadly defined. d. The relevant time horizon is long.
Consider the following simple regression model y = 
0 + 1x1 + u. The variable z is a poor instrument for x if _____.
A. there is a high correlation between z and x B. there is a low correlation between z and x C. there is a high correlation between z and u D. there is a low correlation between z and u
Answer the following questions true (T) or false (F)
1. Mortgage-backed securities are groups of mortgages that are bundled together and sold to investors. 2. Economies cannot function without money. 3. If gold is used as money in an economy, the money supply is easy to control.