Here is a consumption function: C = C0 + MPC(Yd). If MPC is 0.75, then we know that
A) as Yd rises by $1, Co rises by $0.75.
B) as Yd rises by $1, C rises by $0.75.
C) Yd rises by $0.75.
D) as C0 rises by $0.75, Yd rises by $1.
B
You might also like to view...
Annual demand and supply for the Entronics company is given by:
QD = 5,000 + 0.5 I + 0.2 A - 100P, and QS = -5000 + 100P where Q is the quantity per year, P is price, I is income per household, and A is advertising expenditure. a. If A = $10,000 and I = $25,000, what is the demand curve? b. Given the demand curve in part a., what is equilibrium price and quantity? c. If consumer incomes increase to $30,000, what will be the impact on equilibrium price and quantity?
Externalities are fundamentally the result of
a. the absence of competition in a market. b. the lack of well-defined or enforced property rights. c. poor information on the part of consumers. d. the presence of significant comparative advantages in production.
Risky transactions are those in which:
A. one party withholds information from the other party and uses that to his advantage. B. one party to a transaction uses the other party's lack of information to their advantage. C. there is an balance of information between buyer and seller. D. complete information is not available.
Exhibit 20-1 Money market demand and supply curves
?
Beginning from an equilibrium at E1 in Exhibit 20-1, a decrease in the money supply from $150 billion to $100 billion causes people to:
A. sell bonds and drive the price of bonds down. B. sell bonds and drive the price of bonds up. C. buy bonds and drive the price of bonds down. D. buy bonds and drive the price of bonds up.