As disposable income decreases, consumption:
A. increases.
B. decreases.
C. may either increase or decrease depending on the wealth effect.
D. may either increase or decrease depending on the mpc.
Answer: B
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In the long run, a representative firm in a monopolistically competitive industry will end up
A. producing a level of output at which marginal cost and price are equal. B. having an elasticity of demand that will be less than it was in the short run. C. earning a normal profit, but not an economic profit. D. having a larger number of competitors than it will in the short run.
Which of the following statements is true of the gains to trade?
A) The gains to trade expand as trading partners become more alike. B) The gains to trade shrink as trading partners become more alike. C) The trading nations can enjoy gains to trade even when none of these countries has a comparative advantage in the production of any good. D) The gains to trade are equal for all trading partners.
________ means people are more unhappy when they suffer losses than they are happy when they achieve gains
A) Loss fundamentals B) Loss aversion C) Loss leader D) Loss cycle
How does an increase in the price level affect the aggregate quantity of goods and services demanded?
What will be an ideal response?