According to Keynes, the consumption-income relationship is shown as C = a + bYD. Therefore, the saving-income relationship is
a. S = a + (1 ? b)YD.
b. S = ? a + (1 ? b)YD.
c. S = a + (1 ? b)/YD.
d. S = ? a + (1? b)/YD.
B
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The principle of decreasing marginal benefit means that as the quantity of a good consumed
A) decreases, its marginal benefit decreases. B) increases, its marginal benefit decreases. C) increases, its total benefit decreases. D) None of the above answers is correct.
The multiplier effect suggests that:
A. spending $1 increases GDP by more than $1. B. spending $1 increases GDP by less than $1. C. saving $1 increases GDP by more than $1. D. spending $1 decreases GDP by more than $1.
Indifference curves are convex because of the diminishing
a. law of demand b. income c. prices d. choices to consumers e. marginal rates of substitution
An economy has two workers, Jen and Rich. Every day they work, Jen can produce 2 TVs or 10 radios, and Rich can produce 4 TVs or 12 radios. What is the opportunity cost for Rich to produce one radio?
A. 4 TVs B. 1/3 TV C. 1/6 TV D. 1/12 TV