If you know that an increase in a household's disposable income from $35,000 to $45,000 leads to an increase in consumption from $30,000 to $38,000, then you can conclude that the:
a. Marginal propensity to save is .25
b. Marginal propensity to consume is .8
c. Slope of the consumption schedule is .75
d. Average propensity to consume is .8
b. Marginal propensity to consume is .8
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Which of the following is the best example of the substitution effect?
a. Joe buys fewer apples and more oranges as the result of an increase in the price of apples. b. Joe buys more apples when his income increases. c. Joe buys an apple slicer when the price of apples decreases. d. Joe buys less sugar as the result of an increase in price of apples.
A special interest issue is one that:
a. provides large private benefits and large social benefits b. provides small private benefits and large social benefits. c. provides large benefits to each of a small number of people and small costs to each of a large number of people. d. provides small benefits to each of a small number of people and large costs to each of a large number of people.
The term "open market operations" refers to the:
A. loan-making activities of commercial banks. B. effect of expansionary monetary policy on interest rates. C. operation of competitive markets in the banking industry as the result of deregulation. D. buying and selling of government securities by the Federal Reserve.
Signaling is when someone takes action to:
A. reveal one's own private information. B. find out the opportunity cost of acquiring more information. C. reveal private information about someone else. D. None of these statements is true.