According to the permanent income hypothesis, the impact of ________
A) a change in permanent income on consumption is greater than the impact resulting from a change in transitory income
B) a change in transitory income on consumption is greater than the impact resulting from a change in permanent income
C) a change in transitory income is felt primarily through changes in the total tax revenue paid to the federal government
D) a change in permanent income on consumption is larger than the impact resulting from a change in future income
A
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The country of Glassen has experienced an expansionary gap for the last three years. The advocates of passive policy are likely to suggest a policy which causes _____. a. the short-run aggregate supply to shift to the left
b. the short-run aggregate supply to shift to the right. c. rising prices to shift the aggregate demand to the left. d. wages to fall relatively quickly. e. aggregate demand to shift to the right as wages increase.
In order to sell more of its product, a monopolist must
a. lobby the government for a subsidy. b. lower its price. c. advertise. d. enact barriers to entry in related markets.
A form of implicit collusion where one firm in an oligopoly announces a price change which is matched by other firms in the same industry is
A) "follow the leader" pricing. B) price leadership. C) retaliation pricing. D) "tit-for-tat" pricing.
Refer to the information provided in Table 23.8 below to answer the question(s) that follow. Table 23.8
Refer to Table 23.8. The MPC in this economy is
A. 0.5. B. 0.6. C. 0.7. D. 0.8.