If price rises, what happens to supply of a product?
a. It increases.
b. It decreases.
c. It does not change.
d. Uncertain--economic theory has no answer to this question.
c. It does not change.
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C = 2,550 + (mpc)y
I = 800 G = 1,100 NX = 50 If the equilibrium level of GDP is $11,250, using the equations for C, I, G, and NX shown above, find the value of the marginal propensity to consume. What will be an ideal response?
Rational expectations are more accurate than adaptive expectations, ________
A) on average B) always C) because they require less information D) except when policies have changed
In events leading to the collapse of the housing bubble, inflated home values caused consumers to:
A. save less and spend more. B. spend less and save more. C. spend more on homes and less on all other goods. D. hold their savings to equity in their homes and stop saving more liquid forms of assets.
A tax on a good
a. raises the price that buyers effectively pay and raises the price that sellers effectively receive. b. raises the price that buyers effectively pay and lowers the price that sellers effectively receive. c. lowers the price that buyers effectively pay and raises the price that sellers effectively receive. d. lowers the price that buyers effectively pay and lowers the price that sellers effectively receive.