Suppose a consumption function is given as C = $150 + 0.75YD. The marginal propensity to save is
A. 0.75.
B. 150.
C. -0.75.
D. 0.25.
Answer: D
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Allocative efficiency occurs
A) anywhere inside or on the production possibilities frontier. B) when the total cost of production is minimized. C) at all points on the production possibilities frontier. D) at only one point on the production possibilities frontier. E) at the points where the production possibilities frontier crosses the horizontal or vertical axis.
Which of the following countries is not a member of The Group of Seven?
A. the United States B. China C. Germany D. Japan
What is the result when real planned saving exceeds real planned investment spending?
A) The economy is in equilibrium. B) There is unplanned accumulation of business inventories. C) There is unplanned depletion of business inventories. D) Employment expands.
Which of the following is most likely to lead to an increase in the demand for U.S. dollars in the foreign exchange market?
a. U.S. firms purchasing raw materials from Japan b. U.S. speculators expecting the value of the German mark to rise c. The Fed intervening in the foreign exchange market and devaluing the dollar d. Speculative outflows of money from the United States to Britain because of higher interest rates in Britain e. Japanese cars becoming more popular in the United States