If the MPC is 0.8 and disposable income shrinks by $100 million. Consumption would
a. rise by $8 million
b. rise by $80 million
c. fall by $80 million
d. fall by $8 million
e. fall by $20 million
C
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Refer to Figure 4-6. What area represents consumer surplus at the equilibrium price of P1?
A) D + E B) A C) A + B + C + D + E D) A + B + C
As a group, oligopolists would always earn the highest profit if they would
a. produce the competitive quantity of output. b. produce more than the competitive quantity of output. c. charge the same price that a monopolist would charge if the market were a monopoly. d. operate according to their own individual self-interests.
An advancement in technology will cause
a) the PPF to shift inwards towards the origin. b) the PPF to shift outwards away from the origin. c) the economy to move down along the PPF curve. d) the economy to move upwards along the PPF curve.
Open economies grow more slowly than closed economies
Indicate whether the statement is true or false