According to Friedman, the apparent conflict between cross-section data which shows a saving rate that varies with income group and time-series data which shows that the saving ratio over the past century is fairly constant is resolved by
A) pointing out that cross-section and time-series data are not comparable.
B) interpreting the low saving of poor people as due to the fact that they must buy necessities.
C) interpreting the high saving of rich people as due to the transitory nature of much income earned by the rich.
D) distinguished between a permanent marginal propensity to consume and a transitory marginal propensity to consume.
C
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A Keynesian forecast of economic growth next year is likely to focus on
A) money demand. B) money supply. C) velocity of money. D) investment spending plans.
Increased government purchases crowd out private purchases whenever the economy is
A. Experiencing an AD shortfall. B. Facing serious cyclical unemployment. C. Operating below full employment. D. On the production possibilities curve.
Joe is the owner of the 7-11 Mini Mart, Sam is the owner of the SuperAmerica Mini Mart, and together they are the only two gas stations in town. Currently, they both charge $3 per gallon, and each earns a profit of $1,000. If Joe cuts his price to $2.90 and Sam continues to charge $3, then Joe's profit will be $1,350, and Sam's profit will be $500. Similarly, if Sam cuts his price to $2.90 and Joe continues to charge $3, then Sam's profit will be $1,350, and Joe's profit will be $500. If Sam and Joe both cut their price to $2.90, then they will each earn a profit of $900.For Joe, keeping his price at $3 per gallon is a:
A. profit-maximizing strategy. B. dominant strategy. C. revenue-maximizing strategy. D. dominated strategy.
The entry of women into the workforce since the 1960s resulted in:
A. A shift outward in the production possibilities curve of the United States B. A shift inward in the production possibilities curve in the United States C. A movement along the existing production possibilities curve in the United States D. A falling real wage for women workers of the United States