Suppose you read in the Wall Street Journal that actual investment in Mexico in 2003 was precisely the intended investment Mexican businesses had hoped to make. You would conclude that in 2003, the level of inventories in Mexico
a. had not changed but national income fell
b. had not changed and national income was at its equilibrium level
c. increased and national income fell
d. increased along with national income
e. was zero
B
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The smaller the amount saved out of a change in disposable income, the
A) more horizontal the consumption function. B) larger the MPC. C) more net taxes affect consumption. D) smaller is autonomous consumption. E) smaller the MPC.
If the risk associated with a particular outcome is ________, or the value of a particular outcome is ________, then cost-benefit analysis might lead people to indulge in too much risk
A) overestimated, overestimated B) overestimated; underestimated C) underestimated; overestimated D) underestimated; underestimated
If the U.S. dollar appreciates from 1.25 Swiss franc per U.S. dollar to 1.5 francs per dollar, then the franc depreciates from ________ U.S. dollars per franc to ________ U.S. dollars per franc
A) 0.80; 0.67 B) 0.67; 0.80 C) 0.50; 0.33 D) 0.33; 0.50
Which of the following events would increase the supply of tomatoes?
a. the introduction of mechanized tomato pickers, which raises the cost of production b. an increase in wages for the tomato pickers c. a decrease in the cost of fertilizer for the tomato plants d. unseasonably hot, dry weather in the tomato-growing regions of the nation e. a decrease in the price of pasta products