The slope of the consumption function equals the
a. price elasticity of demand.
b. marginal propensity to consume.
c. marginal rate of investment.
d. marginal propensity to save.
b. marginal propensity to consume.
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If we know that Canada exports maple syrup, we can conclude that maple syrup consumers in Canada are worse off than they would be in the absence of trade
a. True b. False Indicate whether the statement is true or false
__________ identifies the level of Real GDP the economy produces when all economywide adjustments have taken place and there are no misperceptions on the part of workers
A) Short-run equilibrium B) Disequilibrium C) Long-run equilibrium D) Equilibrium E) none of the above
The United States is capable of producing many goods and services that it imports, but it does not because
A. We have lost those skilled workers. B. We can export goods that we specialize in. C. We produce those goods more cheaply if we make them ourselves. D. We can import those goods at a lower opportunity cost than if we make them ourselves.
"Expansionary fiscal policy is always 100 percent effective when the short-run aggregate supply curve is horizontal." Is this statement TRUE?
A. no, because crowding out could take place B. no, because the increased spending may cause the price level to increase C. yes, because theoretically nothing else can offset the effects of fiscal policy D. yes, when the long-run aggregate supply curve is horizontal too