If the marginal propensity to consume = 0.75, then:
A. the marginal propensity to save = 0.75.
B. the marginal propensity to save = 0.25
C. the marginal propensity to save = 0.20.
D. since the marginal propensity to save and the marginal propensity to consume are unrelated, we cannot determine the marginal propensity to save from the information given.
Answer: B
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All of the following arguments are presented in favor of inflation targeting EXCEPT
A) it would draw attention to what the central bank can achieve in practice. B) it would provide an anchor for inflationary expectations. C) it would promote accountability by providing a yardstick by which policy can be measured. D) it would reduce the lags inherent in monetary policy.
Use the above table. Assuming constant opportunity costs, if countries Alpha and Beta specialize based on comparative advantage, then
A) Alpha should specialize in knives and Beta should specialize in forks. B) Alpha should specialize in forks and Beta should specialize in knives. C) Alpha should specialize in producing both items. D) Beta should produce both items.
In 2015, imports represented:
A. about 15 percent of U.S. GDP. B. about 1 percent of U.S. GDP. C. about 40 percent of U.S. GDP. D. nearly 70 percent of U.S. GDP.
According to advocates of income inequality, if income were to be distributed equally,
a. productivity would increase b. it would take a little time for the distribution to become unequal again c. efficient allocation of resources would occur d. the MRP of the poor would rise and the MRP of the rich would fall e. productivity would decrease