Exhibit 8-8 Consumption function
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In Exhibit 8-8, which of the following could cause the movement from C1 to C2?
A. a decrease in real asset holdings
B. lower interest rates
C. expectations that the economy will grow
D. expectations of lower future prices
Answer: B
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Which of the following would not increase the price of books?
a. A new literacy program that encourages reading. b. A $10,000 permission fee paid for the right to reprint an author's work. c. An increase in the price of the ink used to print the books. d. Higher costs for the glycerin used to make the glue with which the books are bound.
Which of the following is likely to lead to a partial recovery after a recession?
A) A decrease in money supply B) A decrease in tax rates C) A decrease in government spending D) An increase in the interest rate
In the United States, all levels of government together spend about
a. one out of every three dollars paid for finished goods and services b. half of the dollars paid for defense spending c. the same amount as private citizens and corporations d. one out of every three dollars paid for education e. 80 percent of their budgets on transfer payments
Average revenue minus average total cost equals
a. total economic profit b. total accounting profit c. a normal profit d. economic profit per unit of output e. marginal cost