According to Modigliani's life-cycle hypothesis, the marginal propensity to consume
a. changes over a lifetime: it's higher in the earlier and later periods of a person's working life, and lower in the middle years
b. is constant over a person's working life
c. changes over a lifetime: it's lower in the earlier and later periods of a person's working life, and higher in the middle years
d. is determined by a person's permanent income and has nothing to do with the transitory incomes earned over a life time
e. changes over a lifetime: it's higher in the earlier and middle periods of a person's working life, and lower in the later years
A
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The income-expenditure multiplier is the effect of a one-unit increase in:
A. after-tax disposable income on consumption. B. expenditure on potential output. C. after-tax disposable income on short-run equilibrium output. D. expenditure on short-run equilibrium output.
In Figure 3-4 above, the shift from Ap0 to Ap1 could have been caused by a rise in net exports of
A) 180. B) 750. C) 120. D) 300.
All of the following are possible private-sector adjustments to an increase in the government's budget deficit except
A) increasing private savings. B) decreasing investment. C) decreasing expenditures on transfer programs. D) increasing the trade deficit by increasing imports and/or decreasing exports.
In 2015, Richard buys a 2003 Chevrolet minivan from a neighbor. Will this be counted in the GDP for 2015?
a. Yes b. No c. Yes, if sales tax is paid d. No, because the purchase was from an individual not a dealer