If the consumption function is C = 20 + 0.8YD, then an increase in disposable income by $100 will result in an increase in consumer expenditure by
A) $58.
B) $64.
C) $80.
D) $100.
C
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The risk structure of interest rates refers to
A) the amount of additional interest necessary to compensate savers for the greater risk of default on some bonds. B) the relationship among the interest rates on similar bonds with different maturities. C) the relationship among the interest rates on bonds with the same maturity. D) the amount of additional yield necessary to compensate savers for the lesser liquidity of some bonds.
Postwar globalization is not our first experience with worldwide globalization
a. True b. False
Cashews and asparagus are normal goods. When the price of asparagus falls, the substitution effect by itself causes
a. the consumer to feel richer, so the consumer buys more cashews. b. the consumer to feel richer, so the consumer buys less cashews. c. cashews to be relatively more expensive, so the consumer buys less cashews. d. cashews to be relatively less expensive, so the consumer buys more cashews.
Open and explicit agreements concerning pricing and output shares transform an oligopoly into a
A. Differentiated oligopoly. B. Monopoly. C. Perfectly competitive firm. D. Cartel.