If the U.S. national income is ten times the national income of Canada and the MPC in the US is 0.75 while it is 0.90 in Canada, then
a. the MPS is greater in the U.S. but consumption is greater in Canada
b. the MPS is greater in the U.S. but saving is greater in Canada
c. the MPS is greater in Canada but saving is greater in the U.S.
d. both the MPS and saving is greater in Canada
e. both the MPS and saving is greater in the U.S.
E
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Paying salespeople a fixed wage contract, one in which income does not depend on the volume of sales, avoids
A) both adverse selection and moral hazard. B) neither adverse selection nor moral hazard. C) adverse selection but not moral hazard. D) moral hazard but not adverse selection.
Which of the following correctly describes fractional reserve banking?
a. The federal government only insures a fraction of the deposits at most banks. b. Banks keep a fraction of their loans with other banks to maintain the quality of their loan portfolio. c. Banks can loan out all but a small fraction of its own money, but must hold all money deposited at the bank on reserve in bank vaults. d. Banks can loan out all but a fraction of its own money, but must hold all money deposited at the bank on reserve in bank vaults.
Which of the following would result in a movement along the demand curve?
A) a change in preferences B) an increase in the number of buyers C) an increase in the number of suppliers D) a decrease in income
Twin studies are helpful in producing an unbiased estimate of the returns to schooling, because twins are likely to
A. work in the same occupation. B. earn comparable wages. C. work in the same industry. D. achieve the same amount of education. E. have similar abilities.