The marginal propensity to consume out of income
A) is larger than one.
B) is equal to one.
C) is smaller than one.
D) varies around one.
C
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According to the law of diminishing returns, when some factors of production are fixed, in order to increase production by a given amount, a firm will eventually need to add successively:
A. smaller and smaller quantities of the variable factors of production. B. larger and larger quantities of the fixed factor of production. C. larger and larger quantities of the variable factors of production. D. constant quantities of the variable factors of production.
If firms are producing at a profit-maximizing level of output where the price is less than the average total cost:
A. economic profits may be positive. B. accounting profits will be zero. C. economic profits are negative. D. accounting profits must be positive.
Which of the following is a valid statement?
a. Required reserve ratio = required reserves as a percentage to total deposits. b. Required reserves = the maximum reserves required by the Fed. c. Excess reserves = total reserves plus required reserves. d. All of these.
Life-cycle wealth refers to the
a. income earned by an individual b. value of stock holdings by an individual c. monetary assets held by an individual d. non-money assets held by individuals e. amount of assets received through inheritance