Which statement is true?
A. The poverty line is raised each year.
B. The poverty line is lowered each year.
C. The poverty line stays the same from one year to the next.
D. None of these statements are true.
A. The poverty line is raised each year.
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Answer the following statements true (T) or false (F)
If the marginal propensity to save is 0.4, the multiplier is 2.5. Money will fail to serve as a medium of exchange if it ceases to be a store of value. Aggregate expenditure includes consumption spending, unplanned investment spending, government purchases, and net exports. When Jack's income increases by $1,000, he spends an additional $850 dollars. This implies that his marginal propensity to consume is 0.85. When the dollar becomes stronger compared to the Japanese Yen, then the Japanese imports from the U.S. will increase.
Loretta agrees to lend Ted $500,000 to buy computers for his consulting firm. They agree to a nominal interest rate of 8%. Both expect the inflation rate to be 2%
(a) Calculate the expected real interest rate. (b) If inflation turns out to be 3% over the life of the loan, what is the real interest rate? Who gains from unexpectedly high inflation, Loretta or Ted? (c) If inflation turns out to be 1% over the life of the loan, what is the real interest rate? Who gains from unexpectedly low inflation, Loretta or Ted?
If the short run elasticity of demand for widgets is 0.7 and the long run elasticity of demand for widgets is 1.5, a decrease in price will ____ total revenue in the short run and ____ total revenue in the long run. a. Increase; increase
b. Increase; decrease. c. Decrease; increase. d. Decrease; decrease.
If the price of a car in the United States is $26,000, and the exchange rate between the dollar and the British pound rises from $1.50 to $2.00 per pound, then the price of the American car in Britain will
A. remain the same. B. fall. C. rise. D. be irrelevant, because the British government will impose restrictions on imports from the United States.