Answer the following statements true (T) or false (F)
1) The marginal propensity to consume is the ratio of consumption to saving.
2) If people saved more of any extra income that they receive, then the consumption schedule will become flatter.
3) If the consumption schedule becomes steeper, then the saving schedule will become steeper also.
4) If households see the value of their financial assets increase significantly, then the saving schedule will shift upward.
5) The wealth effect will tend to decrease consumption and increase saving.
1) F
2) T
3) F
4) F
5) F
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Which of the following statements is true?
A) The future growth of a stock is more certain than the payments of a bond. B) Differences of opinion about a bond's future may vary considerably but there is less difference about a stock's future. C) A stock can possibly pay dividends forever, but bonds have a fixed number of payments. D) Bonds represent partial ownership in a firm but stocks do not.
A business incurs the following costs per unit: Labor $5/unit; Materials $3/unit and rent $5000/month. If the firm produces 1000 units a month, the total costs equals
a. $5,000 b. $8,000 c. $13,000 d. $3,000
When there is an abrupt increase in the rate of inflation,
a. the actual rate of inflation will tend to fall below the natural rate. b. the actual rate of inflation will tend to rise above the natural rate. c. the actual and natural rate of inflation will generally be equal. d. the natural rate of unemployment will tend to rise.
As a result of a conviction under the Sherman Antitrust Act, Standard Oil of New Jersey
A) was fined for its extensive price discriminating activity. B) was restrained from oil exploration for twenty-five years, which enabled other oil firms to assume leadership in the industry. C) was broken up into many smaller companies. D) went bankrupt and no longer is in existence.