Which of the following is a fiscal policy tool used to stimulate the economy?
A. Increased imports.
B. Reducing inefficient employment of resources.
C. Increased government purchases.
D. Lower interest rates.
Answer: C
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Where the consumption function intersects the 45-degree line
A) consumption will equal only autonomous consumption. B) the average propensity to consume is 0.5. C) savings will be negative. D) saving will be zero.
The primary assets of a finance company are
A) municipal bonds. B) corporate stocks and bonds. C) consumer and business loans. D) mortgages.
The challenge for economists in the early postwar period was to develop a consumption hypothesis that could explain how
A) the saving ratio could remain fairly constant across income groups while the aggregate saving ratio increased over time as average real income grew. B) the saving ratio for high-income families could be lower than for low-income families while the aggregate saving ratio remained fairly constant over time as average real income grew. C) the saving ratio for high-income families could be higher than for low-income families while the aggregate saving ratio remained fairly constant over time as average real income grew.
Over the last few decades, Americans have chosen to cook less at home and eat more at restaurants. This change in behavior, by itself, has
a. reduced measured GDP. b. not affected measured GDP. c. increased measured GDP by the value of the restaurant meals. d. increased measured GDP by the value added by the restaurant's preparation and serving of the meals.