If your real disposable income goes up by $1,000 per week, and your real consumption spending goes up by $800 per week, you have a marginal propensity to consume of
A) 0.2.
B) 0.8.
C) 1.2.
D) 1.0.
Ans: B) 0.8.
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In the above figure, the straight line between the lower left corner and the upper right corner shows
A) perfect equality in income distribution. B) perfect inequality in income distribution. C) that wealth rises as income rises. D) that household size rises as income rises.
If money were valued in terms of how many minutes a person needs to work to buy a dollar, an increase in the number of minutes of work needed would be:
A. no change in the real price of money, just the nominal price increases. B. no change in the real or nominal price of money. C. an increase in the price of money. D. a decline in the price of money.
The amount of revenue the government collects after imposing the tariff is ________.
A. $1,000 B. $40,000 C. $10,000 D. $4,000
Expansionary fiscal policy when the economy is below full employment _______ aggregate demand and real GDP, and the price level _________.
Fill in the blank(s) with the appropriate word(s).