The slope of the fitted line that shows the relationship between consumer spending and disposable income is the
A. marginal propensity to save.
B. probability of expending.
C. marginal income spend.
D. marginal propensity to consume.
Answer: D
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This figure shows the payoffs involved when Sarah and Joe work on a school project together for a single grade. They both will enjoy a higher grade when more effort is put into the project, but they also get pleasure from goofing off and not working on the project. The payoffs can be thought of as the utility each would get from the effort they individually put forth and the grade they jointly receive.
If Sarah and Joe are working on a project together and faced with the choices outlined in the figure shown, we can predict the outcome will be that:
A. both Joe and Sarah put forth low effort.
B. Joe will put forth high effort, and Sarah will put forth low effort.
C. Joe will put forth low effort, and Sarah will put forth high effort.
D. both Joe and Sarah put forth high effort.
When the federal government spends more money than it receives in __________, it creates a need to borrow money, which may be fulfilled internationally and impacts the nation’s trade balance.
a. taxes b. sales c. interest d. income
If the required reserve ratio is 5 percent, then the simple deposit multiplier is
A) 2. B) 5. C) 10. D) 20.
Accurate measurement of GDP is important to business decision-makers because this information will help them better determine the
a. general happiness of a country's citizens. b. course of the economy and the direction of demand for their products. c. economic well-being of a particular group within a country. d. amount of leisure time available and the quality of life in a country.