If your disposable personal income increases from $30,000 to $40,000 and your savings increases from $2,000 to $4,000, your marginal propensity to save (MPS) is:
A. 0.2.
B. 0.4.
C. 0.5.
D. 0.8.
Answer: A
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An increase in the money supply will increase aggregate demand
Indicate whether the statement is true or false
When the term "price" is used in the law of demand, price refers to
A) the dollar price of the good. B) the price of the good relative to the price of another good. C) the absolute price of the good. D) the nominal price of the good relative to its nominal price in the previous year.
Equilibrium price refers to the:
A.) Price at which most producers are willing to sell their product. B.) Price at which the quantity demanded of a good equals the quantity supplied. C.) Price that equals marginal cost. D.) Balance between what producers want to charge and what the government will allow.
Alex, Kara, and Susie are the only three people in a community. Alex is willing to pay $40 for the third unit of a public good; Kara is willing to pay $25. If the marginal cost of producing the third unit is $100, what is the minimum amount that Susie must be willing to pay for it to be efficient for government to produce the third unit?
What will be an ideal response?