Imagine an economy whose autonomous consumption is $100 billion and MPC is constant at 0.90 . Which of the following will shift the economy's consumption curve upward?
a. a tax increase
b. higher capacity utilization rates
c. higher national income
d. lower wealth holdings
e. expectations of higher inflation in the future
E
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Engel's law suggests that the demand for food is
a. income inelastic b. income elastic c. price inelastic d. price elastic e. highly correlated with population size
Whenever average cost exceeds marginal cost,
a. average cost is rising. b. average cost is falling. c. marginal cost is rising. d. marginal cost is falling.
GDP is a useful measure since it provides a single measure of the value of the entire variety of goods and services produced by an economy
a. True b. False Indicate whether the statement is true or false
Some individuals choose to undertake risky prospects while others choose safer ones because they have different:
A. marginal utilities. B. degrees of transitivity. C. income elasticities. D. marginal rates of substitution between risk and reward.