If consumption is defined as C = 2,400 + 0.9Y, then the marginal propensity to consume is 0.9
Indicate whether the statement is true or false
TRUE
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The quantity of real GDP demanded on the AD curve is the equilibrium real GDP when
A) equilibrium expenditure is greater than real GDP. B) aggregate planned expenditure equals real GDP. C) the price level equals the equilibrium price level. D) aggregate planned expenditure is greater than real GDP. E) aggregate planned expenditure is less than real GDP.
A rent ceiling results in a shortage. As a result, which of the following do you expect?
A) The shortage will persist as long as the ceiling is in effect. B) Discrimination as landlords choose their tenants, possibly based on race, age, or gender. C) A black market for apartments whereby higher rents are obtained through various other charges. D) All of the above would be expected.
If MR > MC, a profit-maximizing firm should increase output
Indicate whether the statement is true or false
If the money market is in the liquidity trap, it is operating in the __________ segment of the __________ demand curve
A) vertical; investment B) vertical; money C) horizontal; investment D) horizontal; money