Refer to the above table. The table gives the combinations of real disposable income and real consumption for a college student for a year. What is the value of the average propensity to save when real disposable income equals $400?
A. 0.69
B. 1.45
C. -0.45
D. 0.7
Answer: C
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When a permanent negative supply shock hits the economy, a permanently ________
A) lower equilibrium level of output ensues if the central bank raises interest rates B) lower equilibrium level of output ensues if the central bank does not respond C) higher equilibrium level of inflation ensues if the central bank does not respond D) all of the above E) none of the above
A rise in the value of a currency in relation to another currency in the international market is called:
a. appreciation. b. depreciation. c. devaluation. d. conservation. e. redenomination.
Why is the effect of saving so controversial to economists?
a. Increased saving always has an unambiguously positive effect on the economy b. Increased saving always has an unambiguously negative effect on the economy c. Increased saving may hurt the economy in the short run but help it in the long run d. Decreased saving my hurt the economy in the short run but help it in the long run e. Because different schools of economic thought use different definitions
Good X is an inferior good if a decrease in income leads to
A. an increase in the supply of good X. B. a decrease in the demand for good X. C. a decrease in the supply of good X. D. an increase in the demand for good X.