Consider the following information for a family. If the income for the family is $58,000, then an increase in income by $20,000 will result in an increase in consumption by:
a. $15,000 if the MPC is 0.9.
b. $10,000 if the MPC is 0.5.
c. $12,000 if the MPC is 0.7.
d. $1,000 if the MPC is 0.2.
Answer: b. $10,000 if the MPC is 0.5.
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Use the following diagram to answer the next question.
The move from point 1 to point 2 in the diagram represents ________.
A. a decrease in both the unemployment rate and the inflation rate B. a decrease in the unemployment rate and an increase in the inflation rate C. an increase in the unemployment rate and a decrease in the inflation rate D. an increase in both the unemployment rate and the inflation rate
The dollar is regarded as the "safe haven" currency; investors flock to it when they are worried about the outlook for the global economy
Fears were at their greatest in late 2008 and early 2009 after the collapse of the Lehman Brothers investment bank in September 2008. As investors flocked to the dollar A) the demand for dollars increased and the exchange rate increased. B) the demand for dollars decreased and the exchange rate decreased. C) the supply of dollars increased and the exchange rate decreased. D) the supply of dollars decreased and the exchange rate increased.
Holding a currency to the gold standard works:
A. to the advantage of savers at the expense of borrowers. B. to the advantage of borrowers at the expense of savers. C. for no one, and hurts both savers and borrowers from access to money. D. for everyone, benefiting both savers and borrowers.
The major reason for the twists, turns, and spurts in the economy's growth path, according to real business cycle theorists, is
a. interest rate fluctuations b. wars c. housing shortages d. a climatic change e. year to year changes in the pace of technological change