Assume that an increase of $300 in exports leads to an increase of $750 in equilibrium income. If the marginal propensity to import equals 1/10, the marginal propensity to save must be _____
a. 0.60
b. 0.50
c. 0.40
d. 0.30
e. 0.25
d
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Consider two individuals, Nigel and Mia, who produce hair pins and bandanas. Nigel's and Mia's hourly productivity are shown in Table 3.3. Mia's opportunity cost of producing one hair pin is
A) 1/3 of a bandana. B) 2.5 bandanas. C) 3 bandanas. D) 10 bandanas.
Suppose that government purchases of goods and services increase by $200 and at the same time lump-sum taxes increase by $200 . Which of the following is true in this case?
a. Whether the budget deficit will increase or decrease will depend on the value of the marginal propensity to consume. b. The budget deficit will increase by $200 c. The budget deficit will increase by $400. d. The budget deficit will decrease as the economy expands. e. There will be no change in the budget deficit.
You are the manager of a firm that sells its product in a competitive market at a price of $60. Your firm's cost function is C = 50 + 3Q2. The profit-maximizing output for your firm is:
A. 40. B. 20. C. 10. D. 30.
Inflation is a sustained rise in the general price level.
Answer the following statement true (T) or false (F)