When consumers realize additional income in a household and spend the additional money, the portion of the additional income that is spent is measured by the:
A. credit increase theory.
B. marginal propensity to consume.
C. aggregate demand factor.
D. measure of individual wealth.
Answer: B
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The size of the underground economy would tend to decrease if the government of a country
A) increased income tax rates. B) increased business taxes. C) decreased government regulations on businesses. D) made over-the-counter drugs illegal.
In a market with positive externalities, the market equilibrium price will be less than the efficient equilibrium price
Indicate whether the statement is true or false
Suppose there is a 3 percent increase in the nominal wages of workers in an economy. The annual rate of inflation in the economy is about 6 percent. Which of the following is true in this case? a. Real wages would fall by about 3 percent
b. Real wages would increase by about 20 percent. c. Real wages would fall by about 25 percent. d. Real wages would increase by about 50 percent. e. Real wages would increase by about 10 percent.
An unfavorable balance of trade occurs when:
a. exports equal imports. b. the balance of payments balances. c. the current and capital account in the BOP are equal. d. the value of the exports of goods exceeds the value of the imports of goods. e. the value of the exports of goods is less than the value of the imports of goods .