Which of the following events will cause a reduction in equilibrium output?
A) an increase in the marginal propensity to save
B) an increase in taxes
C) a reduction in the marginal propensity to consume
D) all of the above
E) none of the above
D
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The most important derivative instruments are
A) futures, options, and swaps. B) common and preferred stocks. C) corporate bonds. D) government bonds.
Owners of a coffee shop finds that they can sell 150 donuts a day when the price of a donut is $1.20. When they price donuts at $1, they sell 170 donuts. The absolute value of the price elasticity of demand for donuts is
A) 0.69. B) 1.45. C) 1.00. D) infinity.
The extent to which investment spending changes with changes to income is called? the:
A) marginal propensity to consume.
B) marginal propensity to save.
C) marginal propensity to import.
D) marginal propensity to invest.
The price elasticity of supply is higher when
A. the number of buyers in the market decreases. B. the product in question is an inferior good. C. producers have more time to adjust to price changes. D. the number of buyers in the market increases.