The consumption function shows
A) a positive relationship between an individual's stock of wealth and his level of planned consumption.
B) a negative relationship between planned consumption and aggregate saving.
C) a positive relationship between disposable income and planned consumption.
D) a negative relationship between disposable income and planned consumption.
C
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The invisible hand principle indicates that competitive markets can help promote the efficient use of resources
What will be an ideal response?
During a drought, the price elasticity of demand for water is less than one. During a flood, the price elasticity of demand for water is greater than one. This means that the:
a. demand for water is elastic during a drought and inelastic during a flood. b. demand for water is inelastic during a drought and elastic during a flood. c. demand curve for water cannot have a constant slope. d. quantity of water people choose to consume is independent of the price
Discuss the tools of the Federal Reserve and explain how each can be used to change the money supply and equilibrium interest rate
What will be an ideal response?
When a country loses its comparative advantage in the production of a good it:
A. should stop trading and become self-sufficient. B. will gain the comparative advantage in the production of another good. C. will become a loser in trade in the long run. D. will still have the absolute advantage in the production of the good.