As real disposable income increases, we expect the average propensity to consume (APC)
A) to always be below MPC. B) to increase.
C) to remain unchanged. D) to decrease.
D
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When external costs are present and the government imposes a tax equal to the marginal external cost, then
A) efficiency can be achieved. B) transaction costs will be high. C) the marginal benefit of the external cost will fall. D) property rights must have already been established.
According to the theory of creative destruction,
a. hurricanes and tornadoes stimulate the economy b. technological change destroys competitive markets c. monopolies engage in self-destructive behavior d. competition between industries can break a monopoly e. price wars break out when new products are introduced
International studies of the relationship between GDP per person and quality of life measures such as life expectancy and literacy rates show that larger GDP per person is associated with
a. longer life expectancy and a lower percentage of the population that is literate. b. longer life expectancy and a higher percentage of the population that is literate. c. very nearly the same life expectancy and a lower percentage of the population that is literate. d. very nearly the same life expectancy and a higher percentage of the population that is literate.
Many researchers blame the severity and length of the Great Depression on the breadth and depth of government interference in private market affairs
Indicate whether the statement is true or false