Starting from potential output, if consumer confidence increases and consumers decide to spend more, then this will generate a(n) ________ gap and inflation will ________.
A. recessionary; increase
B. expansionary; decrease
C. expansionary; increase
D. recessionary; decrease
Answer: C
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The slope of the consumption function can be determined by dividing the change in
a. real consumption spending by the change in real disposable income b. nominal spending by the change in nominal disposable income c. real disposable income by the change in real consumption spending d. nominal disposable income by the change in nominal consumption spending e. total consumption spending by the change in autonomous consumption spending
A new discovery makes ink jet computer printers less expensive to produce. At the same time another type of computer printer, the laser printer, also becomes less expensive. What would you expect to happen to the equilibrium price and quantity of ink jet printers?
A. Equilibrium price will rise, but the effect on quantity is uncertain. B. Equilibrium quantity will rise, but the effect on price is uncertain. C. Equilibrium price will fall, but the effect on quantity is uncertain. D. The answer cannot be determined from the information given above.
Assume Sally is initially in equilibrium and that X and Y are normal goods for her. Then the price of X rises. For Sally to move to a new equilibrium point, her consumption of
A. X must increase. B. X must remain constant, but her consumption of Y must increase. C. both X and Y must increase. D. X must decrease.
U.S. farm household income in 2011 was:
A. Less than the average income for all households B. About equal to the average income for all households C. Above the national average income by about $18,000 D. Above the national average income by about $30,000