Which of the following is a step that economists take in order to examine a real-world issue?
a. Determine the results that will occur if the market being considered is a controlled market
b. Look at the real-world results to see the similarities they hold with the results of a free market
c. Suggest remedies and policies to alter the results of a free-market
d. Suggest remedies or policies to alter the real-world result
e. Assume that the market transactions, in a real-world, is completely controlled by the government
d
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A rise in the price level because of an increase in the money wage rate
A. definitely triggers a cost-push inflation B. definitely triggers a demand-pull inflation C. might trigger a cost-push inflation D. might trigger a demand-pull inflation.
The sum of the marginal propensity to consume (MPC) and the marginal propensity to save (MPS) always equals:
A. 1. B. 0. C. the interest rate. D. the marginal propensity to invest (MPI).
Exhibit 8-8 Consumption function
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In Exhibit 8-8, which of the following could cause the movement from C1 to C2?
A. higher wealth B. higher interest rates C. higher taxes D. a technological breakthrough
Suppose a government is considering imposing either a tariff or a quota on imported grain, and either policy will result in exactly 750 tons of grain being imported. How do these policies differ?
A. The quota will generate revenue for the firms that hold import licenses, while the tariff will generate revenue for the government. B. Domestic production will be higher with the quota than with the tariff. C. The price of grain under the quota will be higher than the price under the tariff. D. The price of grain under the tariff will be higher than the price under the quota.