Suppose that John allocates $10,000 of his disposable income for necessities. Any additional income beyond that is both spent and saved. Assume he has a disposable annual income of $50,000 and an MPC=0.8. Based on this information the additional amount spent on non-necessities should be:
A. $10,000.
B. $40,000.
C. $35,000.
D. $32,000.
Answer: D
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In the Keynesian cross diagram, a decline in autonomous consumer expenditure causes the aggregate demand function to shift down, the equilibrium level of aggregate output to ________, and the IS curve to shift to the ________,
everything else held constant. A) rise; left B) rise; right C) fall; left D) fall; right
When a macroeconomic aggregate is procyclical
A) it grows faster than GDP. B) its deviations from trend generally change before the deviations from trend in GDP do. C) its deviations from trend generally change more that the deviations from trend in GDP. D) its deviations from trend are more often of the same sign as the deviations from trend in GDP.
If the quality and quantity of schooling for minorities increases, educational attainment will continue to be rewarded at the current rate
Indicate whether the statement is true or false
Which one of the following statements about tariffs and quotas is correct?
A. Only the tariff produces revenues for the government. B. Only the quota will cause domestic production to increase. C. Only the quota will cause domestic prices paid by consumers to increase. D. Only the quota will cause the quantity of imports to decrease.