If the marginal propensity to consume = 0.75, then:
a. the marginal propensity to save = 0.75.
b. the marginal propensity to save = 1.33.
c. the marginal propensity to save = 0.20.
d. the marginal propensity to save = 0.25.
e. since the marginal propensity to save and the marginal propensity to consume are unrelated, we cannot determine the marginal propensity to save from the information given.
d
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If the required reserve ratio is .10, demand deposits are $200 million, and total reserves are $40 million, then excess reserves are
A) $20 million. B) $40 million. C) $400 million. D) $2,000 million.
Given that the income of franchise restaurant managers is directly tied to profits and the income of the manager of the company-owned restaurant is paid a flat fee, we might expect profits to be:
A. higher in company-owned restaurants. B. equal in both types of restaurants. C. lower in company-owned restaurants. D. None of the statements are correct.
In many markets for personal services (such as shoe repair or lawn care) with low start-up costs,
a. production exhibits constant returns to scale b. economies of scale are exhausted rapidly c. economies of scale are exhausted slowly d. economies of scale are never exhausted e. there are only short-run costs, no long-run costs
The product-variety externality and the business-stealing externality are both spillover benefits of new firms entering a monopolistically competitive market
a. True b. False Indicate whether the statement is true or false