The amount by which consumption increases when after-tax income increases by $1 is called the:
A. marginal propensity to consume.
B. marginal consumption revenue.
C. variable propensity to consume.
D. consumption multiplier effect.
A. marginal propensity to consume.
You might also like to view...
A cost that arises from the production or consumption that falls on someone other than the producer or consumer is called
A) a negative benefit. B) a public choice impact. C) a positive externality. D) a negative externality. E) a private good.
How does the concept of elasticity allow us to improve upon our understanding of supply and demand?
a. Elasticity allows us to analyze supply and demand with greater precision than would be the case in the absence of the elasticity concept. b. Without elasticity, we would not be able to address the direction in which price is likely to move in response to a surplus. c. Without elasticity, we would not be able to address the direction in which price is likely to move in response to a shortage. d. Without elasticity, it is very difficult to assess the degree of competition within a market.
Countercyclical policy:
What will be an ideal response?
Because government services are not sold in markets,
A. taxes are used to value their contribution. B. the government tries to estimate their market value and uses this to measure the government's contribution to GDP. C. they are valued at their cost of production. D. they are excluded from measurements of GDP.