When the price of a good changes, the income effect can be found by comparing the equilibrium quantities purchased
A) on the old budget line and the new budget line.
B) on the original indifference curve when faced with the original prices and when faced with the new prices.
C) on the new budget line and a hypothetical budget line that is a shift back to the original indifference curve parallel to the new budget line.
D) on the new indifference curve.
C
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The above table has data from the nation of Atlantica. Based on these data, what is marginal propensity to consume?
A) 1.50 B) 1.00 C) 1.33 D) 0.50 E) 0.75
In the simple deposit expansion model, an expansion in checkable deposits of $1,000 when the required reserve ratio is equal to 10 percent implies that the Fed
A) sold $1,000 in government bonds. B) sold $100 in government bonds. C) purchased $1000 in government bonds. D) purchased $100 in government bonds.
If a firm produces in a perfectly competitive output market,
a. then it demands its resources in perfectly competitive input markets b. then it demands labor in a perfectly competitive labor market c. the type of market in which it demands labor may be perfectly competitive or imperfectly competitive d. the labor demand curve is the same as its product demand curve e. the labor demand curve facing the firm is perfectly elastic
You read a study that predicts that rising oil prices projected for this summer are certain to fuel inflation. Having taken an economics class, due to this expected change in prices, you predict that spending today will _________ and aggregate demand today will _________.
Fill in the blank(s) with the appropriate word(s).