Use the following data to answer the next question. The disposable income (DI) and consumption (C) schedules are for a private, closed economy (an economy with no government and no international trade). All figures are in billions of dollars.Disposable IncomeConsumption$0$88080160152240224320296400368The marginal propensity to save in this economy is
A. 0.9.
B. 0.1.
C. 0.8.
D. 0.72.
Answer: B
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A monopsonist that wants to hire more labor must pay more for the new labor than it is currently paying and increase the wage rate of all existing employees because
A) the demand curve for labor is inelastic. B) of labor unions. C) the supply of labor is upward sloping. D) of competition in the labor market.
Economists are often required to make unrealistic assumptions concerning the problems they are investigating.
Answer the following statement true (T) or false (F)
If Fredonia has a closed economy, it ________ with other countries.
A. trades B. does not negotiate C. prevents its citizens from traveling to other countries but trades D. does not trade
The risk premium for an investment:
A. is zero (0) for risk-averse investors. B. increases with risk. C. is negative for U.S. treasury securities. D. is a fixed amount added to the risk-free return, regardless of the level of risk.