The marginal propensity to consume (MPC) is the
A) fraction of additional income that is spent.
B) fraction of additional consumption that is not based on the level of income.
C) ratio of consumption to savings.
D) ratio of consumption to income.
A
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The difference in prices for first-class and coach airline tickets exemplifies price discrimination.
Answer the following statement true (T) or false (F)
Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
If the workers of a firm successfully negotiate an increase in wages, which of the following is most likely to happen?
A) The demand curve for the product the firm produces shifts rightward. B) The demand curve for the product the firm produces shifts leftward. C) The supply curve of the product the firm produces shifts rightward. D) The supply curve of the product the firm produces shifts leftward.
Which of the following is not true concerning a currency bailout?
A. It can help avoid a domino effect of depreciating currencies in other economies. B. It occurs when money is lent to an economy to increase or maintain the value of its currency. C. The expectation of a bailout can encourage policies that lead to a currency crisis. D. The International Monetary Fund will bail out any nation with a devaluing currency.