According to the absolute income hypothesis, the marginal propensity to consume
a. is always increasing
b. increases as the absolute level of income increases
c. decreases as the absolute level of income falls
d. decreases as the absolute level of income increases
e. always stays the same
D
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The principle of comparative advantage helps explain trade between nations.
Answer the following statement true (T) or false (F)
Why has the Federal Reserve chairman often been called the second most important person in terms of affecting the economy?
A) The Fed chairman has veto power over all federal spending. B) The Fed is in control of monetary policy. C) The Fed chairman draws the second highest salary of any official of the federal government. D) The Fed has regulatory power over all financial markets.
In the long run, the primary effect of rapid monetary growth is
a. lower nominal interest rates. b. reduced unemployment. c. inflation. d. an increase in real output.
What are the largest asset and the largest liability of a typical bank?
A. Loans of the largest assets and deposits are the largest liability of a typical bank B. Reserves are the largest asset and deposits are the largest liability of a typical bank C. Loans of the largest liability and deposits are the largest asset of a typical bank