The consumption function will shift downward when
A. household wealth decreases.
B. the rate of interest decreases.
C. household saving decreases.
D. real disposable income increases.
Answer: A
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An increase in the supply (curve) of a good implies a larger quantity of the good will now be supplied
A) at the same price. B) even if the price falls substantially. C) only if the price rises. D) whenever the demand decreases.
The mandate for the monetary policy goals that has been given to the Federal Reserve System is an example of a ________ mandate
A) primary B) dual C) secondary D) hierarchical
Refer to the table below. What sum of money should be deposited today in an account that earns 3 percent interest to make each of the five payments above and, when the last payment is made, there will be no money left in the account?
The above table shows a 5 year payment plan. Each payment is made at the end of the year, so after one year, a payment of $1,000 is made, after two years another payment of $1,500 is made and so on. The interest rate is 3 percent.
A) $9,886.70
B) $9,912.56
C) $11,000.00
D) $9,723.45
Because smoking causes illness and disability to smokers, society must maintain more health-service capacity than it would need in the absence of smoking. Since the cost of maintaining this capacity is covered to a substantial degree by health insurance, even nonsmokers must pay higher premiums. Also, smokers hurt nonsmokers as a result of "passive smoke." The Rand Corporation estimates these
costs to be 29 cents per pack of cigarettes. Cigarette taxes average 37 cents per pack. Based on the economist's definition of efficiency, it follows that a. cigarette taxes are too high, and cigarette production is lower than the efficient amount. b. cigarette taxes should be increased until external costs are zero. c. since the tax exceeds the marginal cost, we have a better than efficient outcome. d. we are overconsuming cigarettes.