The growth of cities was due to the existence of important scale economies, which include all of the following except
(a) Central water and sewer systems
(b) Education systems
(c) Crime, congestion and pollution
(d) Police and fire protection
(c)
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A firm whose production process exhibits constant returns to scale would find that if it doubled all of its inputs, its output would ________.
A. double B. less than double C. more than double D. remain constant
When the central bank sells $1,000,000 worth of government bonds to the public, the money supply:
A. increases by $1,000,000. B. decreases by $1,000,000. C. decreases by more than $1,000,000. D. decreases by less than $1,000,000.
When the Treasury borrows from the non-bank public and makes an expenditure of an equal amount, the money supply
A) rises by a multiple of the expenditure. B) rises by an amount equal to the expenditure. C) rises by an amount less than the expenditure. D) is unaffected.
What are the marginal propensity to consume (MPC) and the marginal propensity to save (MPS)? How is the MPC related to the consumption function?