MPC
What will be an ideal response?
Answer: 1
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In Econland autonomous consumption equals 700, the marginal propensity to consume equals 0.80, net taxes are fixed at 50, planned investment is fixed at 100, government purchases are fixed at 100, and net exports are fixed at 40. The slope of the expenditure line is:
A. 0.20. B. 0.80. C. 0.99. D. 0.90.
For an economist to say that too little of the good is produced, what must be true?
A. The consumer surplus plus the producer surplus must be smaller than it could be. B. The producer surplus must be smaller than optimal. C. The consumer surplus must be larger than optimal. D. The consumer surplus must be smaller than optimal.
Generally speaking, the greater the amount of financial wealth people hold in the form of near-monies, the:
A. less is their willingness to spend out of their money incomes. B. less is the asset demand for money. C. greater is the transactions demand for money. D. greater is their willingness to spend out of their money incomes.
The EITC provides substantial work incentive for low-income workers and has only positive supply effects
Indicate whether the statement is true or false