Refer to the above figure. The marginal propensity to consume and the marginal propensity to save
A. are 0.10 and 0.10, respectively.
B. are 0.75 and 0.75, respectively.
C. are 0.15 and 0.95, respectively.
D. depend on the level of income.
Answer: D
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If producers believe that the increase in their relative prices is small relative to the increase in the general price level, then the slope of the short-run aggregate supply curve will be
A) zero. B) small. C) large. D) negative.
If the nominal rate of interest is 10.5 percent, and the inflation rate is 4.3 percent, what is the real rate of interest?
a. 3.0 percent b. 4.3 percent c. 6.2 percent d. 10.5 percent
Monopolistically competitive firms engage in advertising to increase market share and make demand more inelastic
Indicate whether the statement is true or false
Brian Vargo, an auto repair mechanic who remains unemployed because he refuses to work for less than $1,000 an hour, is
a. counted as part of the labor force and is unemployed b. considered frictionally unemployed c. an underemployed worker d. not counted as part of the labor force e. considered productively active even though he isn't working