If marginal propensity to save equals 0.50, then the marginal propensity to consume is:
A) 1.25.
B) 0.50.
C) 0.70.
D) 1.00.
B
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Discuss the production function. How does the production function relate to the labor market and potential GDP?
What will be an ideal response?
In the macroeconomy, demand-side shifts change:
A. aggregate demand only, which is why the price level remains unaffected in the long run. B. only the output level in the long run, while prices eventually return to their long-run potential levels. C. only the price level in the long run, while output eventually returns to its long-run potential level. D. aggregate demand only, which eventually shifts back in the long run.
To reduce our dependence on foreign oil, policy makers must realize that the cross-price elasticity sign for gasoline and fossil fuel-burning cars is negative.
Answer the following statement true (T) or false (F)
Consider Figure 9.8, which depicts the supply and demand for coal. Assume coal production creates external costs. If the government imposes a pollution tax on coal production, the:
A. supply curve of coal would shift to the left. B. supply curve of coal would shift to the right. C. demand curve for coal would shift to the left. D. demand and supply curves for coal would shift to the left.