If the marginal propensity to consume is 0.7 and if output increases by $200, then consumption spending
A) increases by $70.
B) decreases by $70.
C) increases by $140.
D) decreases by $140.
C
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A low rate of inflation, whereby prices increase so slowly from week to week that we hardly notice the change, is referred to as
a. zero inflation b. creeping inflation c. nominal inflation d. real inflation e. episodic inflation
Auctions in recent years have resulted in higher prices paid for letters written by John Wilkes Booth than those written by Abraham Lincoln. What is a reason for this difference in price?
A) There is a surplus of letters written by Booth and a shortage of letters written by Lincoln. B) Many people are more fascinated by villains and anti-heroes than by heroic figures. C) There are more letters available for collectors to buy that were written by Lincoln than there are letters that were written by Booth. D) Booth was a well-known actor; the demand for his letters rose as wealthy actors attempted to buy them.
Refer to the diagram. Which of the following would shift the investment demand curve from ID 1 to ID 3 ?
A. A lower interest rate.
B. Lower expected rates of return on investment.
C. A higher interest rate.
D. Higher expected rates of return on investment.
In which of the following situations would a negative externality most likely be involved?
A. It is night and Kenneth is sitting in his easy chair reading a novel by John Grisham. The lamp he is reading by has only a 40-watt light bulb. He is having a hard time reading. B. Alyson lives near an airport. At five o'clock in the morning every day she can hear the airplanes taking off and it awakens her. C. Lucy went to a fancy restaurant last night and ordered the most expensive meal on the menu. She hated it. D. Richard is taking an economics class from Professor Franklin. Professor Franklin often says things that confuse Richard.