Suppose disposable income increases from $5 trillion to $6 trillion. As a result, consumption expenditure increases from $4 trillion to ________. This result means the MPC equals ______.
A. $4.5 trillion; 4.50
B. $5 trillion; 0.80
C. $4.8 trillion; 0.80
D. $6 trillion; 1.00
Answer: C. $4.8 trillion; 0.80
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What helps to explain the remarkable 7.3% growth rate in South Korea between 1960 and 2011?
A) The education of South Korean women B) A radical reduction in foreign imports and a maximization of South Korean exports C) Huge foreign aid from the World Bank D) All of the above. E) None of the above.
Which of the following statements best reflects how a behavioral economist views individual decision making?
A. Alex makes wrong decisions sometimes, but usually it is only when he has been given bad information. B. Kara carefully calculates and weighs the expected benefits and costs of every option before making a decision. C. Alicia may appear to care about others, but even her seemingly altruistic behaviors are really about furthering her own interests. D. Balin tries to make good, well-thought-out decisions, but his desire for utility in the present means that he often gives in to costly temptations.
Every point on the joint production possibilities frontier represents
A) an initial endowment. B) inefficient production. C) the marginal rate of substitution of goods for each producer. D) at least one producer specializing in production.
Which of the following is NOT a benefit of money when used as a medium of exchange?
A) allowing individuals to specialize B) allowing individuals to pay off debts C) allowing for some economic efficiencies D) providing economic growth