How is it possible for consumption expenditure to be positive even when disposable income is zero?
What will be an ideal response?
Consumption expenditure can be positive when disposable income is zero because people can "dissave," that is, they can use their past saving to finance current consumption expenditure. Dissaving cannot occur indefinitely because eventually people's savings will be dissipated.
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The World Bank's view of the effectiveness of industrial policies in East Asia is that, in general, they
A) hindered growth. B) had little or no effect on growth. C) encouraged growth. D) are the main factor in the success of the East Asian economies. E) worked in Japan and Korea, but not in the other countries.
Probably the most significant factor explaining the drastic drop in the number of bank failures since the Great Depression has been
A) the creation of the FDIC. B) rapid economic growth since 1941. C) the employment of new procedures by the Federal Reserve. D) better bank management.
A perfectly inelastic supply curve is: a. upward sloping to the right
b. downward sloping to the left. c. horizontal. d. vertical.
Refer to the given table. The total change in income resulting from the initial change in investment will be:
A. $100.
B. $20.
C. $80.
D. $200.