At $10,000 of disposable income, Audrey's consumption expenditure was $11,000. At $20,000 of disposable income, Audrey's consumption expenditure was $19,000. What is Audrey's marginal propensity to consume?
What will be an ideal response?
The marginal propensity to consume is the change in consumption expenditure divided by the change in disposable income that brought it about. In this case, the marginal propensity to consume equals ($8,000 รท $10,
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Net exports of goods and services are defined as the
A) value of the goods we sell to foreigners. B) income we receive from selling goods to foreigners. C) value of exports minus the value of imports. D) value of exports minus the income we receive from foreigners. E) value of exports plus the income we receive from foreigners.
A firm's demand schedule for capital is
A. the marginal revenue product and marginal physical product schedule for capital. B. neither the marginal revenue product schedule nor the marginal physical product schedule for capital. C. the marginal revenue product schedule for capital. D. the marginal physical product schedule for capital.
The downward sloping aggregate demand curve can be explained in part through the:
A. positive relationship between the price level and net exports. B. negative relationship between the price level and investment spending. C. positive relationship between the price level and consumption. D. All of these are true.
Proponents of fixed exchange rates argue that the predictability of the fixed exchange rate:
A. allows monetary policy to be used to stabilize the domestic economy. B. decreases trade and economic integration. C. increases trade and economic integration. D. prevents exchange rate overvaluation.