The nation has its own MPC. When national income increases from $300 billion to $400 billion, national consumption increases from $300 billion to $360 billion. At Y = $400 billion, the MPC is:
a. 0.2.
b. 0.5.
c. 0.6.
d. 0.67.
e. 1.33.
c
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When Wal-Mart decides to build a new retail store in a town, it will decide to build a large store rather than a small store if the large store is expected to earn a greater economic profit
What other motive would Wal-Mart have for choosing to build a large store? A) A larger store will help Wal-Mart maintain its position as the leading retail company in the world more than a smaller store would. B) Because of economies of scale, the average total cost of production is less for a larger store than a smaller store. C) A larger store will give Wal-Mart greater political influence in the community. D) A larger store may deter entry into the town by a rival firm.
If an economy is in a liquidity trap, then the nominal interest rate is ________ and the only effective policy that can be used to stimulate the economy is ________
A) zero or negative; expansionary fiscal policy B) zero or negative; expansionary monetary policy C) high and rising; contractionary monetary policy D) high and rising; expansionary monetary policy E) high and rising; expansionary fiscal policy
A bundle:
A. is a specific combination of goods and services an individual could consume. B. describes the amount of people that choose a particular combination of goods. C. is a curve describing different combinations of goods and services an individual could choose to consume. D. is when a store sells goods at a discounted price.
The law of diminishing marginal utility means that: a. marginal utility is maximized when consumers get the same amount of total utility from every good they consume. b. total utility is maximized when consumers get the same amount of marginal utility from the last unit of every good they consume. c. beyond some point, added units of a product provide lower and lower amounts of marginal
utility. d. a consumer would get less utility from the last unit of a good consumed when that good costs $3 than when it costs $1.