John Maynard Keynes's central proposition that a dollar increase in disposable income would increase consumption, but by less than the increase in disposable income, means the marginal propensity to consume (MPC) is:
a. greater than or equal to one.
b. equal to one.
c. less than one, but greater than zero.
d. negative.
c
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Fixing up old houses requires plumbing and carpentry. Jack (who is a jack of all trades but is a master of none) is a decent carpenter and a decent plumber, but is not particularly good at either
He can fix up two houses in a year if he does all of the carpentry and plumbing himself. His wage is $50,000 per year. a. What is Jack's average total cost of fixing up two old houses? b. George is an excellent plumber and Harriet is an excellent carpenter. George can do all of the plumbing and Harriet can do all of the carpentry to fix up five houses per year. Each earns a wage of $50,000 per year. If George and Harriet work together and fix up five old houses each year, what is their average cost? c. What does this problem tell you about one of the sources of economies of scale?
The government of a country that is experiencing strong currency appreciation might find itself under pressure from some of its own citizens. Who would be likely to be bringing pressure and why?
What will be an ideal response?
If the government implements a binding price ceiling on insulin, this will have all of the following effects on the market for insulin except
A) a decrease in economic surplus. B) a decrease in producer surplus. C) an increase in deadweight loss. D) a more efficient equilibrium.
In the United States, monetary policy is carried out by
A) the Federal Reserve System. B) Congress. C) the President. D) Congress and the President acting together.