According to Keynes, what is the most important determinant of households' spending on goods and services?
A. the price level
B. the interest rate
C. autonomous consumption
D. disposable income
Answer: D
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That part of national income not spent on consumption is
a. saving b. investment c. delayed consumption d. induced consumption e. the MPC
Refer to the following graph. The price of capital (r) is $20.
Why wouldn't the firm choose to produce 5,000 units of output with the combination at B?
A. At B, MRTS < 3/2.
B. At B, MPK / r >MPL / w.
C. At B, MPL
In the period from 1996 to 2000, the U.S. economy experienced the unusual combination of
A. high unemployment and high inflation. B. high unemployment and low inflation. C. low unemployment and high inflation. D. low unemployment and low inflation.
If supply is perfectly inelastic, the price elasticity of supply is equal to:
A. 1. B. 0. C. infinity. D. a negative number between 0 and infinity.