If autonomous consumption rises by $60 and, as a result, Real GDP rises by $240, then the marginal propensity to consume is
A) 0.25.
B) 0.75.
C) 0.05.
D) 0.95.
E) none of the above
B
You might also like to view...
Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
In the above figure, the deadweight loss is zero if output is
A) 0 units. B) 10 units. C) 20 units. D) 30 units.
The introduction of a subsidy in a perfectly competitive marketplace that is originally in equilibrium will raise total surplus.
Answer the following statement true (T) or false (F)
Which of the following correctly describes the automatic mechanism through which the economy adjusts to long-run equilibrium?
A) the leftward shift of the short-run aggregate supply curve that occurs after a recession B) the rightward shift of the short-run aggregate supply curve that occurs after a recession C) the leftward shift of the aggregate demand curve that occurs after a recession D) the rightward shift of the aggregate demand curve that occurs during a recession