A change in household preferences for saving that reduces the marginal propensity to save causes the consumption function to _____
a. become steeper
b. become flatter
c. shift upward
d. shift downward
a
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Economics does not study correct or incorrect behaviors but rather it assumes that economic agents behave ________, meaning they make the best decisions given their knowledge of the costs and benefits
A) emotionally B) equitably C) selfishly D) rationally
Although Africa's debt/GNP ratio is larger than Latin America's, the debt-service burden is lighter. Explain this and relate it to changes in the nature of development lending in the 1970s
What will be an ideal response?
Assume the market in the graph shown was originally at an equilibrium with demand D and supply S. The original equilibrium price and quantity were, respectively:
A. $5 and 30. B. $5 and 20. C. $10 and 20. D. $20 and 10.
Suppose the current exchange rate between the U.S. dollar and the Mexican peso is $0.10 = 1 peso. Furthermore, suppose the price level in the United States rises 15 percent at a time when the Mexican price level is stable. According to the purchasing power parity theory, what will be the new equilibrium exchange rate?
A) $0.085 = 1 peso B) $0.13 = 1 peso C) $0.15 = 1 peso D) $0.115 = 1 peso E) none of the above