In the graph for the consumption function, the 45-degree line
A) contains only a consumption component.
B) represents both planned consumption and planned investment.
C) shows various combinations where planned consumption equals real disposable income.
D) reflects a decreasing APC as real disposable income rises.
Answer: C) shows various combinations where planned consumption equals real disposable income.
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Expansionary fiscal policy falls short of its goal. Some economists claim it is due to indirect crowding out. What evidence would be consistent with this claim?
A) The interest rate increased. B) The price level decreased. C) Saving decreased. D) An increase in consumer spending occurred.
The panic of 1893 was caused by the Sherman Silver Act of 1890, which doubled the Treasury's monthly purchase rates to 4
5 million ounces of silver at current market prices and was eased when President Cleveland called for the Act's repeal on June 30, 1893. Indicate whether the statement is true or false
The dean of your college is considering hiring another economics professor. If the additional revenue that the college can earn from employing the professor exceeds the additional cost, the college should
a. do nothing b. continue to study the issue c. hire the professor d. stop offering economics classes e. not hire the professor and lay off a professor already on the faculty
The question of how much labor a firm will hire comes down to:
A. the amount of capital that will be required in order to ensure the worker is productive. B. whether added workers are going to generate more revenue or not. C. if the added workers are going to add profits to the firm. D. whether the value of the marginal product is greater than, less than, or equal to the average total cost.