The average propensity to consume is consumption:
a. Multiplied times savings
b. Multiplied times investment
c. Divided by disposable income
d. Divided by saving
Ans: c. Divided by disposable income
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In real business cycle models, shifts of the aggregate demand curve ________
A) cause changes in inflation, but have no effect on output B) cannot occur C) result from changes in the willingness to work D) result from Solow residuals
Changes in the value of the euro affect the economies of
A. All European countries, but there would be no significant impact on countries outside Europe. B. Only those countries using the euro as currency. C. No countries as long as exchange rates are flexible. D. Potentially the entire world.
In the kinked-demand model of noncollusive oligopoly, each firm thinks the demand curve below the going price is:
A. more elastic than the demand curve above the going price. B. less elastic than the demand curve above the going price. C. less elastic than the marginal revenue curve above the going price. D. more elastic than the marginal revenue curve above the going price.
Figure 10-7
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Which of the diagrams in Figure 10-7 represents a decrease in consumer spending combined with a positive supply shock?
A. (A) and (B) B. (C) and (D) C. (A) and (C) D. (B) and (D)