Suppose a consumption function is given as C = $175 + 0.85YD. The marginal propensity to save is
A. -0.15.
B. 0.15.
C. 0.85.
D. 200.
Answer: B
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Lu Thier is an accomplished violin and viola maker. He can make either 6 violins or 6 violas each year, or a combination such as 3 violins and 3 violas. Which statement below is true?
A) The opportunity cost of producing 1 violin is 1 viola. B) The opportunity cost of producing 1 violin is 3 violas. C) The opportunity cost of producing 1 violin is 6 violas. D) The opportunity cost of producing 1 violin is 9 violas.
The new classical model has as its central idea that
A) workers and firms have rational expectations. B) wage and price stickiness explain fluctuations in real GDP. C) shifts in aggregate demand have no impact on real GDP. D) the Federal Reserve should adopt a monetary growth rule.
A nation's producers can compete effectively with imports from other nations if it has
a. high wages b. low wages c. low labor cost per unit of output d. less specialization e. low labor productivity
Common ownership of resources:
a. is a system by which the government allocates the rights to harvest renewable resources. b. may fail to ensure that harvesting of renewable resources does not exceed the maximum sustainable yield. c. is an environmentally effective method of internalizing an externality problem in renewable resource conservation. d. efficiently controls the harvest of renewable resources. e. usually helps in preventing market failures.