Suppose an increase in disposable income from $3 trillion to $3.2 trillion increases consumption from $2.5 trillion to $2.6 trillion. The marginal propensity to consume is _____
a. 0.1
b. 0.2
c. 0.5
d. 0.8
e. 0.9
c
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Based on the Saving-Investment Diagram, if the difference between values G and E measures the net capital outflow, then ________
A) the difference between values G and E measures the trade surplus B) the difference between values H and D measures the trade surplus C) the domestic real interest rate is indicated by B D) desired saving has decreased E) none of the above
Which of the following is a potential result of a price ceiling?
A) excess supply B) long lines C) higher quality output D) higher marginal costs
Who ultimately benefits from price supports in agriculture?
A) consumers B) grocery store owners C) farmers D) exporters
In regulated industries, the optimal regulation is to set price such that MC=P.
Answer the following statement true (T) or false (F)