Within the Keynesian model, if the marginal propensity to consume is 0.8, which of the following is true?
a. When consumption increases by $5, income increases by $1.
b. When consumption increases by $1, saving increases by $5.
c. When investment increases by $1, income increases by $5.
d. When investment increases by $1, saving increases by $5.
C
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The figure above shows the demand for and supply of rental housing in Smallton. If a rent ceiling is set at $400, there is
A) a shortage of 4,000 units of rental housing. B) a shortage of 2,000 units of rental housing. C) a surplus of 3,000 units of rental housing. D) neither a shortage nor a surplus of rental housing.
If incomes are rising, in the market for an inferior good,
a. its price will rise and the quantity exchanged will rise. b. its price will rise and the quantity exchanged will fall. c. its price will fall and the quantity exchanged will rise. d. its price will fall and the quantity exchanged will fall.
The current price per share of the XYZ company, which is traded on the New York Stock Exchange, is $100. At that price, the total quantity of shares demanded is 1,000 and the total quantity supplied for trade is 1,500. It follows that
a. $100 is the equilibrium price per share. b. there will be downward pressure on the price of shares of the XYZ company. c. there will be upward pressure on the price of shares of the XYZ company. d. there is a shortage of shares of the XYZ company on the stock exchange.
Under a policy of average-cost pricing, a monopolist must charge the price at which its ________ cost curve intersects its ________ curve.
A. marginal; demand B. average variable; demand C. marginal; marginal revenue D. average; demand