Suppose the consumption function is C = $200 + 0.85YD. If disposable income is $400, consumption is
A. $540.
B. $340.
C. $200.
D. $185.
Answer: A
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Major macroeconomic questions include all of the following EXCEPT:
A. Can inflation be reduced without generating additional unemployment? B. Are free trade agreements beneficial? C. How do monopoly firms set prices and determine quantities to produce? D. What causes slowdowns in productivity growth?
Assume that the full-employment level of output is $500, and the price level associated with full-employment output is 100. Also assume that the economy's current level of output is $450 and, at the price level of 100, current aggregate demand is $400. If the government wants to move the economy back to the full-employment level of output and the MPC is 0.75, then it should
A. reduce government purchases by $25. B. increase government purchases by $25. C. increase government purchases by $100. D. reduce government purchases by $100.
Select the graph above that best shows the change in the market specified in the following situation: In the market for leather coats, when leather coats become more fashionable among young consumers.
a. Graph A b. Graph B c. Graph C d. Graph D
Which of the following is true regarding transactional relationships?
a. They represent up to 80% of all relationships. b. They are largely unimportant. c. They are vital to profitability. d. They needed to be managed efficiently and fairly. e. Only A and D f. Only A, C, and D