The above figure plots income and consumption in a nation. In 2007
A) consumption was equal to $25,000 and income was equal to $28,000.
B) consumption was equal to $28,000 and income was equal to $25,000.
C) consumption was equal to $25,000 and income was equal to $25,000.
D) consumption was equal to $27,000 and income was equal to $31,000.
A
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If reserves held at the Fed by the private banks decrease, ________
A) the nominal interest rate will decrease B) banks will make more loans C) demand for labor will increase D) bank deposits will decrease
If a good has a negative income elasticity of demand, this indicates that the good is
A) normal. B) a substitute with another good. C) inferior. D) a complement with another good.
The output gap can best be described as:
A) the percentage difference between GDP and its potential B) the difference between GDP in the current year compared to the previous year C) the difference between a nation's GDP and that of the nation with the highest GDP D) the difference between GDP and its forecasted level
Microeconomics involves the analysis of smaller, less developed economies while macroeconomics is concerned with the analysis of larger developed economies
a. True b. False