The aggregate consumption function is C = 150 + 0.75Yd. If income is $500 and net taxes are zero, consumption equals
A. 275.
B. 350.
C. 525.
D. 650.
Answer: C
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According to the gravity model, a characteristic that tends to affect the probability of trade existing between any two countries is
A) their cultural affinity. B) the average weight/value of their traded goods. C) their colonial-historical ties. D) the distance between them. E) the number of different product varieties produced by their industries.
Exit from a perfectly competitive industry causes the market supply curve to shift to the left, resulting in a lower quantity of output and a higher price
a. True b. False Indicate whether the statement is true or false
If the price of walnuts rises, many people would switch from consuming walnuts to consuming pecans. But if the price of salt rises, people would have difficulty purchasing something to use in its place. These examples illustrate the importance of
a. the availability of close substitutes in determining the price elasticity of demand. b. a necessity versus a luxury in determining the price elasticity of demand. c. the definition of a market in determining the price elasticity of demand. d. the time horizon in determining the price elasticity of demand.
The tools of demand-side macroeconomic policy are the money supply and prices.
Answer the following statement true (T) or false (F)