The MPC can be defined as the:
a. Change in income divided by the change in consumption
b. Ratio of income to saving
c. Change in consumption divided by the change in income
d. Ratio of saving to consumption
c. Change in consumption divided by the change in income
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
What is the future value of $375 at an interest rate of 3 percent one year from today?
a. $371.75 b. $386.25 c. $393.33 d. None of the above are correct to the nearest cent.
In the United States, all money is essentially the debt of government, commercial banks, and thrift institutions.
Answer the following statement true (T) or false (F)
In general, a firm will be unlikely to invest as long as the
A. firm cannot sell bonds directly to the public and instead must borrow from a bank. B. profits realized from the investment are insufficient to cover the interest payments. C. interest rate is greater than the inflation rate. D. firm has to borrow any money to make the investment.