An increase in the marginal propensity to consume (MPC) leads to a decrease in the spending multiplier
a. True
b. False
Indicate whether the statement is true or false
False
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Figure 5-13
In Figure 5-13, the line AB is
A. an indifference curve. B. a budget line. C. a marginal utility curve. D. a demand curve.
Most people buy insurance because they
a. are risk lovers b. enjoy the gamble c. are risk neutral d. are risk averse
Which of the following statements is correct?
a. A tax levied on buyers will never be partially paid by sellers. b. Who actually pays a tax depends on the price elasticities of supply and demand. c. Government can decide who actually pays a tax. d. A tax levied on sellers always will be passed on completely to buyers.
The substitution bias in the consumer price index refers to the
a. substitution by consumers toward new goods and away from old goods. b. substitution by consumers toward a smaller number of high-quality goods and away from a larger number of low-quality goods. c. substitution by consumers toward goods that have become relatively less expensive and away from goods that have become relatively more expensive. d. substitution of new prices for old prices in the CPI basket of goods and services from one year to the next.