The marginal propensity to consume (mpc) is the:
A. amount by which disposable income increases when consumption increases by $1.
B. percentage by which consumption increases when disposable income increases by 1 percent.
C. percentage by which disposable income increases when consumption increases by 1 percent.
D. amount by which consumption increases when disposable income increases by $1.
Answer: D
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________ was the main proponent of the view that changes in the money supply can drive business cycles
A) Milton Friedman B) John Maynard Keynes C) Adam Smith D) David Ricardo
The price elasticity of demand between milk and soda is likely to be
a. negative, because the goods are complements b. positive, because the goods are complements c. negative, because the goods are substitutes d. positive, because the goods are substitutes e. 0, because the goods are not usually consumed by the same person at one time
A supply schedule can be plotted on a graph to yield a supply curve
a. True b. False Indicate whether the statement is true or false
Assume the analysis of Friedman and Phelps is correct, so that the following equation is valid: Unemployment rate = Natural rate of unemployment - a × (?ctual inflation - x). In this equation,
a. a is a parameter that measures how much actual inflation responds to expected inflation. b. a = 0 at the point of intersection of the short-run and long-run Phillips curves. c. x is the expected rate of inflation. d. All of the above are correct.