In seeking to explain what determines GDP, monetarists focus on the money supply while Keynesians focus on the spending components of total expenditures
Indicate whether the statement is true or false
True
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The CPI in year one equaled 1.45. The CPI in year two equaled 1.51. The rate of inflation between years one and two was ________ percent.
A. 6.0 B. 4.0 C. 4.1 D. 4.5
Suppose the equilibrium price of oranges is $2.00 per pound. If the actual price is above the equilibrium price, a
A) shortage exists and the price falls to restore equilibrium. B) shortage exists and the price rises to restore equilibrium. C) surplus exists and the price falls to restore equilibrium. D) surplus exists and the price rises to restore equilibrium. E) surplus exists but nothing happens until either the demand or the supply changes.
If high incomes inspire more saving than low incomes ________
A) the average propensity to consume falls as income rises B) the marginal propensity to consume rises as income rises C) autonomous consumption falls as income rises D) the average propensity to consume rises as wealth rises
Roger spends all of his money on racquetballs and food. What would happen to Roger's budget line if his income increased by 10 percent, holding prices constant?
a. It would shift inward. b. It would rotate about the axis for food. c. It would rotate about the axis for racquetballs. d. Nothing would happen to the budget line, because the relative prices for food and racquetballs have not changed. e. It would shift outward.