The sum of the marginal propensity to consume (MPC) and the marginal propensity to save (MPS) always equals:
A. 1.
B. 0.
C. the interest rate.
D. the marginal propensity to invest (MPI).
Answer: A
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Suppose you have a collection of gold coins from the 19th century. Comment on their suitability to provide for you each of the three functions of money
What will be an ideal response?
If the government uses stabilization policies to reduce inflation, the economy may have to suffer
a. higher rates of real GDP growth. b. higher rates of unemployment. c. lower rates of unemployment. d. higher rates of price level growth.
A bond is an asset of the holder.
Answer the following statement true (T) or false (F)
If nominal GDP of a country increased and real GDP remained unchanged in a particular year, which of the following is most likely to have taken place?
a. Output increased and the price level increased b. Output increased and the price level decreased c. Output remained constant and the price level increased d. Output decreased and the price level decreased e. Output increased and the price level remained constant