Everything else held constant, if total consumption increases from $600 to $800 because of an increase of disposable income of $400, then the mpc is equal to
A) 0.2.
B) 0.4.
C) 0.5.
D) 0.6.
C
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When cost-push inflation starts, real GDP ________ and the price level ________
A) decreases; falls B) does not change; falls C) decreases; rises D) does not change; does not change E) increases; falls
The table above lists six points on the production possibilities frontier for grain and cars. What is the opportunity cost of producing the 26th car?
A) 2 tons of grain per car B) 4 tons of grain per car C) 0.25 tons of grain per car D) 0.5 tons of grain per car
In the open-economy macroeconomic model, if the supply of loanable funds increases, then the interest rate
a. and the real exchange rate increase. b. and the real exchange rate decrease. c. increases and the real exchange rate decreases. d. decreases and the real exchange rate increases.
Use the following graph to answer the next question.
In the graph, Dt is the transactions demand for money, Dm is the total demand for money, and Sm is the supply of money. The market is initially in equilibrium at a 6% rate of interest. If the supply of money increases as shown, then the asset demand for money will increase by
A. $75. B. $325. C. $125. D. $200.