When a decrease in the scale of production leads to higher average costs, the industry exhibits
A. constant returns to scale.
B. diminishing returns.
C. decreasing returns to scale.
D. increasing returns to scale.
Answer: D
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The nation has its own MPC. When national income increases from $300 billion to $400 billion, national consumption increases from $300 billion to $360 billion. At Y = $400 billion, the MPC is:
a. 0.2. b. 0.5. c. 0.6. d. 0.67. e. 1.33.
When people like yourself hold money in the event that a good opportunity may arise, such as the opportunity to purchase high interest-bearing assets, economists classify this money as satisfying your
a. precautionary motive b. transactions motive c. speculative motive d. liquidity motive e. investment motive
Under a flexible exchange rate system, there is no need for foreign exchange reserves.
Answer the following statement true (T) or false (F)
Govts want savings to increase, ____
a. so that loan interest rates will increase b. so that spending on business investment will increase c. so that immigration will increase d. all