Suppose that Alan, Annie, Amanda, Alicia, and Anthony begin with the same MPC. According to Keynes's absolute income hypothesis, who ends up with the highest MPC?
a. Alicia, an attorney who earns $200,000 per year as a corporate tax specialist
b. Annie, a college student living on $5,000 of student loans
c. Alan, a new college graduate earning $24,000 in his first job
d. Amanda, a fifty-year-old CEO earning $133,000
e. Anthony, a twenty-two-year-old rap star earning $3 million
B
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Economic goods are items that
A) are used only by economists. B) provide satisfaction to users. C) cannot be sold at any price in the market. D) individuals would pay to get rid off.
Ignoring the government and foreign sectors, if planned investment spending is $500 billion, planned saving is $800 billion, and real Gross Domestic Product (GDP) is $13 trillion, then unplanned inventories will
A) decrease $300 billion. B) increase $300 billion. C) increase $800 billion. D) not change.
Most analysts expect the largest federal spending category to continue to grow in importance for many years into the future. What category of spending is this?
a. national defense b. education c. income security d. farm support programs
Refer to the above graph. A decrease in supply would best be reflected by a change from:
a. Point 2 to point 1 b. Point 3 to point 6 c. Point 5 to point 2 d. Point 5 to point 1