If Pat's income increased from $250,000 to $500,000 and his consumption increased from $200,000 to $300,000, what was his marginal propensity to consume?
a. 0.4
b. 0.6
c. 0.8
d. 0.9
a
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The principle of comparative advantage states that a country should specialize in the production of those goods that have the highest opportunity costs
a. True b. False Indicate whether the statement is true or false
Banks
A. have no role in the money creation process and never have. B. have no role in the money creation process, though they once did. C. create money because they take deposits and make loans. D. create money because they are the ones that print it.
For a monopolist to sell more units of output
A. the other competing firms must sell fewer units. B. demand must become more elastic. C. the price must be reduced. D. the price must be increased.
Since classical economists and monetarists believe that the economy operates at full employment, real GDP, that is, along the vertical segment of aggregate supply,
a. any increase in the money supply can only end up raising the price level b. any increase in the money supply can only end up lowering the price level c. any decrease in the money supply can only end up raising the price level d. changes in the money supply will not affect the price level e. any increase in the money supply will cause both nominal and real GDP to increase