A decrease in the marginal propensity to save is likely to
A. Decrease physical capital investment.
B. Have no effect on physical capital investment.
C. Increase or decrease physical capital investment, depending on magnitude.
D. Increase physical capital investment.
Answer: A
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The median voter theorem states that the outcome of a majority vote
A) tends to favor the preferences of high-income individuals and ignore the median voter. B) is determined by the average consumer and producer in an economy. C) is likely to represent the preferences of the voter who is in the political middle. D) is likely to represent the preferences of society's middle-income voter.
The production possibilities frontier provides an illustration of the principle that
a. trade can make everyone better off. b. governments can sometimes improve market outcomes. c. people face trade-offs. d. people respond to incentives.
Let demand be given by P = 10 - Q; let supply be given by P = Q. What is the equilibrium price?
A. 2 B. 5 C. 10 D. 0
Economic income is the sum of consumption and
A. the change in net worth. B. wealth. C. net worth. D. transfer payments.