Refer to Scenario 17.1. If the threshold educational level y* is set at 14,
A) only individuals in Group A will attain it.
B) only individuals in Group B will attain it.
C) individuals in both groups will attain it.
D) no individuals will attain it.
E) some fraction of individuals in each group will attain it.
D
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An increase in the marginal propensity to save (MPS)
A) increases autonomous consumption. B) increases the value of the multiplier. C) increases the marginal propensity to consume (MPC). D) none of the above.
If the income elasticity of demand for a service is 0.6, then a 5 percent increase in income will generate a __________ in quantity demanded
a. 3 percent decrease b. 3 percent increase c. 8.33 percent decrease d. 8.33 percent increase e. 0.12 percent decrease
Cost-of-living adjustments are:
A. indexed payments. B. common in the U.S. C. not performed on social security payments. D. not very common in Europe.
Refer to the above diagram. The economy is at equilibrium at point C. What fiscal policy would increase real GDP?
A. Increase aggregate demand from AD1 to AD2 by increasing government spending. B. Make no change because the economy is at or near its full-employment level of real output. C. Increase aggregate demand from AD2 to AD1 by decreasing taxes. D. Decrease aggregate demand from AD2 to AD3 by increasing taxes.