If disposable income falls, consumption expenditure falls ________
A) by an amount that depends on the real interest rate
B) so that planned expenditure remains constant
C) by an amount smaller than the decrease in disposable income
D) all of the above
E) none of the above
C
You might also like to view...
The production possibilities curve illustrates which two of the following essential principles?
A. Economic growth and market failure. B. Factors of production and price signals. C. Market mechanisms and laissez faire. D. Scarce resources and opportunity cost.
Both Stan and Kyle own potato chip factories. Stan's factory has low fixed costs and high variable costs. Kyle's factory has high fixed costs and low variable costs. Currently, each factory is producing 5,000 bags of potato chips at the same total cost. Complete the following statement with the correct answer. If each produces
A. more, their costs will be equal. B. less, the costs of Kyle's factory will exceed those of Stan's factory. C. more, the costs of Kyle's factory will exceed those of Stan's factory. D. less, their costs will be equal.
Secondary effects are consequences of economic actions that develop slowly over time as people react to events
a. True b. False
Efficiency is reached by allocating resources to those who have the greatest willingness to pay for them. This can be achieved in a market where a negative externality is present by:
A. taxing consumers. B. place a quota at the efficient level. C. giving consumers a subsidy. D. All of these will achieve efficiency.