?
In Figure 5-16, Adam is
A. better off at C than at D and able to afford either C or D.
B. better off at D than at C but only able to afford C.
C. equally well off at C and D and able to afford either C or D.
D. equally well off at C and D but only able to afford C.
Answer: D
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If the Fed sells U.S. government securities to banks, the federal funds rate ________ and banks' reserves ________
A) falls; increase B) rises; increase C) falls; decrease D) rises; do not change E) rises; decrease
Maryanne expects to work for another 30 years and expects to live another 10 years after she retires. If Maryanne completely smooths consumption over her lifetime, her marginal propensity to consume out of wealth is
A) 0.025. B) 0.033. C) 0.075. D) 0.10.
A dual economy is characterized by:
a. rapid productivity growth in both the agricultural sector and the manufacturing sector. b. uneven development trends in two economic sectors. c. drastic differences in regional work ethics. d. the nonexistence of the government and foreign trade sectors. e. a manufacturing sector that does not depend on natural resource supplies for production.
Refer to the above figure. The marginal propensity to consume and the marginal propensity to save
A. are 0.10 and 0.10, respectively. B. are 0.75 and 0.75, respectively. C. are 0.15 and 0.95, respectively. D. depend on the level of income.