Suppose that when disposable income rises from 5.2 trillion to 6 trillion, consumption rises from 5 trillion to 5.6 trillion. What is the marginal propensity to save?
What will be an ideal response?
0.25
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The more generous unemployment benefits are, the ________ the unemployment rate remains and the ________ the time frame people tend to remain unemployed
A) higher; longer B) higher; shorter C) lower; longer D) lower; shorter
When a bond is sold at a discount, the term discount refers to
a. the rate of interest. b. the face value of the bond minus its current price. c. its current price. d. its face value multiplied by 1 + r.
The current demand for a good would decrease if
a. the price of a complementary good rose. b. the price of a substitute good rose. c. consumers suddenly believed the price of the good would be sharply higher in the future. d. consumer income increased.
In a two-person, two-good economy, the gains to specialization will be larger when:
A. there are large differences between the individuals in their opportunity costs of producing the two goods. B. there are small differences between the individuals in their opportunity costs of producing the two goods. C. neither person has an absolute advantage. D. one person has an absolute advantage in both goods.