Which of the following statements is TRUE?
A) APC + APS = 1
B) APC + APS < 1
C) APC + MPS = 1
D) APC + APS + MPC + MPS = 1
Answer: A) APC + APS = 1
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The "crowding-out effect" refers to how a government budget deficit
A) shifts only the supply of loanable funds curve leftward. B) shifts both the demand for and the supply of loanable funds curves leftward. C) increases the equilibrium quantity of investment. D) shifts only the demand for loanable funds curve leftward. E) decreases the equilibrium quantity of investment.
Which of the following is not a condition required for the first welfare theorem to hold:
A. No government policy interferes with the formation of prices. B. No market actor has market power. C. Tastes are quasilinear. D. Income is distributed fairly before markets open. E. (a) and (c) F. (b) and (c) G. (c) and (d) H. (b) and (d)
When housing prices ________, as they did beginning in 2006 following the housing market bubble, consumption spending on furniture, appliances, and home improvements decline as many households find it ________ to borrow against the value of their
homes. A) rise; harder B) fall; harder C) fall; easier D) rise; easier
On the diagram above, show the quantity of consumption per worker in equilibrium
If the actual capital per worker were greater than k*, would consumption be higher or lower than it is in equilibrium? Describe what would happen in an economy with such a high level of capital per worker.