The marginal propensity to consume is defined as the
What will be an ideal response?
Fraction of a change in income that is spent on consumption
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Based on the theory of purchasing power parity, in the long run, currencies of countries with significant inflation will tend to:
A. be flexible. B. appreciate. C. have nominal exchange rates. D. depreciate.
Economists observed the following growth rates in the fourth quarter of 1995: real GDP = 2.8 percent; M1 = 7.8 percent; GDP Deflator = 2.2 percent. Given this data, the growth of velocity was approximately
a. ?7.8 percent. b. ?5.0 percent. c. ?2.8 percent. d. ?2.2 percent. e. ?2.0 percent.
Activities designed to convert resources into goods and services is known as
A) supply. B) consumption. C) production. D) scarcity.
A fiduciary monetary system is
A. one which cannot have any inflation. B. dependent on the public's faith to accept the currency. C. fully backed by gold. D. dependent on barter for exchanges of goods and services.