If consumers spend 85 cents out of every extra dollar received, the:
A. MPC is 0.85.
B. MPC is 0.15.
C. MPC is 6.67.
D. MPS is 0.85.
A. MPC is 0.85.
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The annual percentage rate of change in the price level is the:
A. cost of living. B. inflation rate. C. relative price. D. Fisher effect.
The demand for a product produced in a perfectly competitive market permanently increases. In the short run, the price
A) rises and each firm produces less output. B) rises and each firm produces more output. C) does not change as new firms enter the industry. D) does not change because each firm produces more output.
If the real interest rate and the nominal interest rate are both negative and equal to each other, then the
A. inflation premium is zero. B. inflation premium is also negative. C. inflation premium is positive. D. economy must be in a recession.
Refer to the above figure. A farmer has 50 acres of land on which to grow wheat or beans. An acre of land yields 400 bushels of beans or 800 bushels of wheat. Which of the following is a possible combination of beans and wheat that can be grown, assuming the land is farmed efficiently?
A. 25,000 bushels of beans and 25,000 bushels of wheat B. 15,000 bushels of beans and 10,000 bushels of wheat C. 30,000 bushels of each D. 20,000 bushels of beans and 40,000 bushels of wheat