Assuming that investment, government expenditures, and net exports are all autonomous, the marginal propensity to consume for the economy represented in Figure 9.9 is
A. 0.25.
B. 1.0 since aggregate expenditure is a straight line.
C. 0.5.
D. Indeterminate since there is no consumption function.
Answer: C
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Most economists feel that the ability to alter the unemployment rate with fiscal and monetary policies is ______.
a. more limited than previously believed b. more powerful than previously believed c. impossible d. easy
A shift in supply is defined as a change in
A. Equilibrium quantity. B. Price. C. Quantity supplied because of a change in price. D. The supply curve because of a change in a determinant of supply.
In an experiment that employed the dictator game, economists at Cornell University gave student "allocators" the option of dividing $20 in only two ways (a) $18 for themselves and $2 to another student, or (b) $10 for themselves and $10 to another
student. What was one result from this experiment? A) Most allocators chose to give themselves $18 and $2 to the other students. B) Most of the students who were not allocators did not like having someone else make decisions for them. C) A majority of the female allocators chose option (a); a majority of the male allocators chose option (b). D) Most of the allocators apparently valued acting fairly.
In what cases would the market share held by the dominant firm be or not be an especially relevant or important factor in determining whether a firm has too much market power?
What will be an ideal response?