Assume that the marginal propensity to consume equals 0.75 and the marginal propensity to import equals 0.10 . By how much does spending on domestic goods increase if income increases by $300?
a. $195
b. $225
c. $30
d. $300
e. $75
a
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When we use the midpoint method to compute the price elasticity of demand we use
A) the original quantity and the average price. B) the original price and the average quantity. C) the average price and the average quantity. D) either the original or new price, and the average quantity. E) the average price and the original quantity.
Which of the following approaches to understanding and predicting consumer behavior does not actually solicit any information from any potential customers?
A) Test marketing. B) Conjoint analysis. C) Analysis of historical data. D) Expert opinion.
Paper money in the U.S. is: a. fiat money
b. more than half of M2. c. only partially backed by gold and silver in Fort Knox. d. convertible into specie (gold or silver) at the holder's request.
Which of the following would be included when calculating Gross Domestic Product?
A. a Social Security check for $1,500 B. the purchase of a previously owned house for $300,000 C. the purchase of a used automobile from a friend D. none of these