If C = 900 + 0.3Y, then autonomous expenditure is:
(a) 900.
(b) 300.
(c) 1200.
(d) None of the above.
Answer: (a) 900.
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The Fed has announced that its views its long term target for the inflation rate as:
A. 5%. B. 0%. C. 2%. D. 10%.
A country reports that its actual real GDP is greater than its potential GDP. It must be that
A) more workers decided to quit work in order to enjoy leisure time. B) the excess by which real GDP exceeds potential GDP is only temporary, and eventually real GDP will decrease to be equal to potential GDP. C) the price level is increasing. D) an error was made when calculating actual real GDP. E) None of the above answers is correct because it is impossible for a country's real GDP to exceed its potential GDP.
Change in U.S. policy can lead to changes in inflationary expectations, interest rates, and exchange rates simultaneously as they all adjust to new equilibrium levels
Indicate whether the statement is true or false
Mr. Rational has $27 that he plans to spend purchasing 5 units of good X (priced at $3 per unit) and 6 units of good Y (priced at $2 per unit). The marginal utility of the fifth unit of X is 30, and the marginal utility of the sixth unit of Y is 30 . If Mr. Rational is a utility maximizer, he should:
a. not buy anything. b. buy more of X and less of Y. c. buy less of X and more of Y. d. buy X and Y in the quantities indicated. e. buy less of X and even lesser than that of Y.