Refer to the information provided in Table 23.4 below to answer the question(s) that follow.
Table 23.4
Refer to Table 23.4. Assuming society's MPC is constant, at an aggregate income level of $1,200, aggregate consumption would be
A. $2,000.
B. $1,400.
C. $1,100.
D. $950.
Answer: C
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A rightward shift of the long-run aggregate supply curve is caused by
A) an increase in the minimum wage. B) an increase in the average duration of unemployment. C) improvements in technology and resource endowments. D) an increase in the GDP deflator.
Of the following sequences of price levels, which correctly represents a 5 percent inflation rate?
A) 100, 105, 105, 105 B) 100, 105, 110, 115 C) 100, 105, 110.25, 115.76 D) 95, 100, 105, 110 E) 100, 100, 100, 100
Budget deficits are appropriate during
A. recessions, but not inflations. B. inflations, but not recessions. C. recessions and inflations. D. neither recessions nor inflations.
Which of the following is incorrect?
A. Floating exchange rates permit countries to have different inflation rates. B. Overall, floating exchange rates discipline countries to have low inflation rates. C. With fixed exchange rates, a country that prefers to have a lower inflation rate than its trading partners will tend to import inflation from its partners. D. Since 1973, high degrees of variability of floating exchange rates may have caused considerable adjustment into or out of trade-oriented production from time to time.