Generally speaking, the greater the MPS, the
A. larger would be the increase in income that results from an increase in consumption spending.
B. smaller would be the increase in income that results from an increase in consumption spending.
C. smaller would be the increase in income that results from a decrease in consumption spending.
D. larger would be the increase in income that results from a decrease in consumption spending.
Answer: B
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A cost of unemployment typically borne by society at large rather than the unemployed themselves is:
A. lost self-esteem. B. lost tax revenue. C. lost income. D. feelings of loss of control over one's life
Define the production function. Discuss why the production function exhibits diminishing returns
What will be an ideal response?
A. What are the two effects of an increase in the wage rate on an individual's labor supply decision? Briefly explain each effect
b. Explain how a labor supply curve could be backward bending. What will be an ideal response?
Increased liquidity in the banking system occurs when ________
A) people buy more bonds B) the demand for real money balances declines C) banks buy more bonds from the central bank D) all of the above E) none of the above