The relationship in the economy between consumption and income is called _____
Fill in the blank(s) with the appropriate word(s).
the consumption function.
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Refer to Figure 11.4. Which diagram illustrates the effect of a decrease in the marginal propensity to consume?
A) A B) B C) C D) D
When demand is ____ a percentage change in ____ is exactly offset by the same percentage change in ____ demanded, the net result being a constant total consumer expenditure
a. elastic; price; quantity b. unit elastic; price; quantity c. inelastic; quantity; price d. inelastic; price; quantity e. none of the above
Which of the following exchange rate systems is advisable for a country that would like to have greater exchange rate stability but also would like to have the its exchange rate change gradually over time as its prices relative to other countries change?
a. Crawling peg b. Fixed exchange rates c. Managed float d. Fixed rates within bands
Figure 2-3
shows the production possibilities frontier for a music processing plant that can produce both compact disks and cassettes. The opportunity cost of moving from point A to point E is
a.
zero
b.
30 cassettes
c.
180 compact disks
d.
cannot be determined because point E is unattainable under current technology and resources
e.
80 cassettes