How do we calculate the effects of real GDP on consumption expenditure and imports by using the marginal propensity to consume and the marginal propensity to import?
What will be an ideal response?
The effects of real GDP on consumption expenditure and imports are determined respectively by the marginal propensity to consume and the marginal propensity to import. In particular, the effect of a change in real GDP on consumption expenditure equals the marginal propensity to consume multiplied by the change in disposable income. Similarly, the effect of a change in real GDP on imports equals the marginal propensity to import multiplied by the change in real GDP.
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The law of demand implies, holding everything else constant, that as the price of yogurt
A) decreases, the quantity of yogurt demanded will decrease. B) increases, the demand for yogurt will increase. C) increases, the quantity of yogurt demanded will decrease. D) decreases, the demand for yogurt will increase.
Why would people outside the United States choose to hold dollars?
What will be an ideal response?
Supplementary Security Incomes are provided by the U.S. government to those who:
a. regularly pay a social security tax. b. are below 65 years of age. c. lack the required education to be absorbed in the job market. d. earn less than $4,500 per year. e. are temporarily unemployed.
The present discounted value of a future payment will decrease when the
A. Opportunity cost of money decreases. B. Interest rate increases. C. Future payment is closer to the present. D. Risk of nonpayment increases.