If the average propensity to consume is 1.0, the marginal propensity to consume is 0.8, and real disposable income increases by $100, the additional saving is
A) $0.
B) $20.
C) $80.
D) $100.
B
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The Employment Act of 1946 states that
a. the Fed should use monetary policy only to control the rate of inflation. b. the government should promote full employment and production. c. the government should periodically increase the minimum wage and unemployment insurance benefits. d. All of the above are correct.
If the Fed purchases $100,000 in government bonds from a bank, then the
A. liabilities of the bank rise by $100,000. B. reserves of the bank fall by $100,000. C. reserves of the bank rise by $100,000. D. assets of the bank rise by $100,000.
When AVC is falling, ATC
A. must be rising. B. must be falling. C. may be falling or rising. D. will remain constant.
When social and private costs differ, economists state that
A. the society will produce inside the production possibilities frontier. B. there will be economic profit in the society. C. there is not an efficiency problem but an equity problem. D. there is an externality.