As disposable income increases, consumption:
A. may either increase or decrease depending on the mpc.
B. decreases.
C. may either increase or decrease depending on the wealth effect.
D. increases.
Answer: D
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In the above table, the fact that there is a minus sign before the number for unilateral transfers means that
A) Country X has significant inflation. B) Country X imported more goods than it exported. C) Country X received more in foreign aid than it gave in foreign aid. D) Country X gave more to foreign residents than foreign residents gave to Country X.
The percentage change in the demand for film divided by the percentage change in the price of cameras indicates
a. the cross-price elasticity of demand between film and cameras b. the cross-price elasticity of demand for photographs c. the price elasticity of demand for film d. the price elasticity of demand for cameras e. nothing because the two goods fall into the broadly defined category of photographic equipment
Which of the following increases U.S. aggregate demand?
a. a lower price level, increasing citizen's real wealth b. a lower price level, reducing interest rates c. a lower price level, increasing exports and decreasing imports d. None of the above
Real business cycle theory differs from the Schumpeterian innovation cycle in that it
a. sees no cyclical patterns, only unevenness in the economy's growth path b. calls for a constant injection of government spending c. projects clear and discernible business cycles d. focuses on technological change while the innovation cycle does not e. emphasizes the critical role of countercyclical fiscal policy