As the marginal propensity to consume (MPC) increases, the spending multiplier:
a. increases.
b. decreases.
c. remains constant.
d. becomes undefinable.
a
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The difference between microeconomics and macroeconomics is that
A) microeconomics looks at supply and demand for goods, macroeconomics looks at supply and demand for services. B) microeconomics looks at prices, macroeconomics looks at inflation. C) microeconomics looks at individual consumers, macroeconomics looks at national totals. D) microeconomics looks at national issues, macroeconomics looks at global issues.
Foreign income is defined to be income earned:
A. by a nation’s firms when they operate abroad. B. when a domestic citizen works abroad. C. on investments made abroad. D. by those living outside a country.
In order to accurately capture the multiplier effect, it is important to know:
A. individual's wealth. B. what proportion of their additional income people spend. C. what people's expectations of the future are. D. real GDP.
John is planning ahead for retirement in a two-period world. When John is young he will earn $1 million, and when John is old and retired he will be given $50,000 from Social Security. If the interest rate between the two time periods is 7 percent, what is the slope of John's budget constraint when considering the consumption possibilities between the two periods if consumption when young is
graphed on the horizontal axis and consumption when old is graphed on the vertical axis? a. -0.89 b. -1.05 c. -1.07 d. -1.12