In the graph for the consumption function, the 45-degree line
A) contains only a consumption component.
B) represents both planned consumption and planned investment.
C) shows various combinations where planned consumption equals real disposable income.
D) reflects a decreasing APC as real disposable income rises.
Ans: C) shows various combinations where planned consumption equals real disposable income.
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You notice that the price and quantity of wheat both decrease. This observation can be the result of the
A) demand curve for wheat shifting rightward. B) demand curve for wheat shifting leftward. C) supply curve of wheat shifting rightward. D) supply curve of wheat shifting leftward.
Suppose that at current consumption levels an individual's marginal utility of consuming an extra hot dog is 10 whereas the marginal utility of consuming an extra soft drink is 2 . Then the MRS (of soft drinks for hot dogs)—that is, the number of hot dogs the individual is willing to give up to get one more soft drink—is:
a. 5. b. 2. c. 1/2. d. 1/5.
The money supply and velocity of money tell us the:
A. price value of real output. B. real output. C. nominal value with inflation accounted for. D. nominal value of firm output.
The international trade agreement that was executed in the 1940s was
a. the NAFTA b. the U.S.–Mexico Border 2012 Agreement c. the London Convention d. the 1996 Protocol e. the GATT