An MPC value of less than 1.0 indicates that as income increases:
A. Consumption also increases, and by more than the increase in income
B. Consumption also increases, and at the same rate as the increase in income
C. Consumption will go in the opposite direction and decrease
D. Consumption also increases, though not as much as income
D. Consumption also increases, though not as much as income
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The incidence of a tax:
A. falls entirely on consumers if supply is perfectly inelastic. B. falls entirely on consumers if demand is perfectly elastic. C. is shared by suppliers and consumers if demand is perfectly elastic. D. falls entirely on suppliers if demand is perfectly elastic.
It does not matter whether a tax is levied on the buyers or the sellers of a good because
a. sellers always bear the full burden of the tax. b. buyers always bear the full burden of the tax. c. buyers and sellers will share the burden of the tax. d. None of the above is correct; the incidence of the tax does depend on whether the buyers or the sellers are required to pay the tax.
Discretionary policy calls for continual adjustments to the money supply and is associated with the monetarist perspective.
a. true b. false
The return to schooling for society is higher than the return to schooling for the individual if
a. the concept of diminishing returns applies to education. b. the concept of constant returns to scale applies to education. c. human capital conveys positive externalities. d. investment in human capital involves no opportunity costs.