Unfair advertising practices are investigated by the Federal Trade Commission.
Answer the following statement true (T) or false (F)
True
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If potential GDP increases, what happens to aggregate supply? Does the LAS curve shift or is there a movement along the LAS curve? Does the SAS curve shift or is there a movement along the SAS curve?
What will be an ideal response?
As national income increases, consumption spending increases as well, always by the same amount. That is, as national income increases, MPC remains constant, according to
a. Duesenberry's relative income hypothesis b. Keynes's absolute income hypothesis c. Friedman's permanent income hypothesis d. Modigliani's life-cycle hypothesis e. real asset theory
The equilibrating force in the credit market in the classical model is
A. the interest rate. B. the price level. C. fiscal policy. D. full employment.
Suppose consumption is $7,500 when income is $4,000 and the MPS equals 0.4. When income increases to $6,000, consumption is
A. $8,050. B. $8,300. C. $8,700. D. $9,500.