If your income increases from $40,000 to $48,000 and your consumption increases from $35,000 to $39,000 . your marginal propensity to consume (MPC) is:
a. 0.20.
b. 0.40.
c. 0.50.
d. 0.80.
e. 1.00.
c
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If the adoption of a new technology led to gains in productivity ________
A) the ensuing positive supply shock would lead to an immediate increase in output B) in the short-run, the ensuing increase in supply would lower inflation C) and if this new technology permanently altered the productive capacity of the economy then the increase in output and decrease in inflation would be permanent as well D) all of the above E) none of the above
Suppose The United Bank of Glassen has loaned $250 to Mr. Joseph Langdon for his business. Mr. Langdon repays the loan with a check written against his own bank, Rexan Bank. Which of the following is likely to happen as a result of this transaction? a. The reserves at the United Bank of Glassen will fall
b. The reserves at Rexan Bank will increase. c. Checkable deposits at Rexan Bank will increase. d. Rexan Bank will make more loans than before. e. The reserves and checkable deposits of Rexan Bank will decrease.
Beginning from the full-employment level of real GDP, an increase in one of the components of the aggregate demand curve will increase the: a. average level of prices (CPI). b. unemployment rate
c. natural level of real GDP. d. level of investment spending. e. level of government spending.
Which of the following financial investments is highly liquid and has very little risk but offers a low rate of return?
a. Savings account b. Mutual fund c. Certificate of deposit d. Treasury bond