Data on after-tax income and consumption spending for the Adam Smith family are given below:After-tax IncomeConsumption Spending9,00018,10014,00022,60019,00027,10024,00031,600Based on these data, the Adam Smith family has a marginal propensity to consume equal to:
A. 0.9.
B. 0.6.
C. 0.75.
D. 0.8.
Answer: A
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As of October 2012, which of the following was true?
A) deposits of foreign governments and international organizations > bank reserves > currency in circulation B) currency in circulation > bank reserves > deposits of foreign governments and international organizations C) bank reserves > currency in circulation > deposits of foreign government and international organizations D) currency in circulation > deposits of foreign governments and international organizations > bank reserves
To optimally deter crime, law enforcement authorities should:
A) set higher fines for crimes that have a lower probability of being caught. B) set the fine equal to the expected benefit, even if it is difficult to catch the offenders. C) ignore the probabilities of catching offenders and attempt to prevent crime at all costs. D) set very high fines regardless of the probability that an offender is caught.
To what extent should monetary policy be used to fine-tune the economy?
Suppose Brazil has a comparative advantage over other countries in producing almonds, but other countries have an absolute advantage over Brazil in producing almonds. If trade in almonds is allowed, Brazil
a. will import almonds. b. will export almonds. c. will either import almonds or export almonds, but it is not clear from the given information. d. would have nothing to gain either from exporting or importing almonds.