The average propensity to consume is A) real consumption expenditures divided by real saving. B) real saving divided by real consumption expenditures. C) real consumption expenditures divided by real disposable income. D) real disposable income divided by real consumption expenditures. ANSWER C
Date: September 2nd, 2020
What is a primary determinant of the asset demand for money? I. the interest rate II. the opportunity cost of holding money III. the supply of money A) I only B) III only C) both I and II D) both II and III ANSWER C
Date: September 2nd, 2020
The Laffer curve A) initially slopes upward as increasing tax rates lead to increasing tax revenue but eventually will slope downward as increasing tax rates lead to decreasing tax revenue. B) slopes upward throughout its range since increasing tax rates will always lead to increases in tax revenue. C) is horizontal because tax revenue is […]
Date: September 2nd, 2020
Which of the following is the most liquid asset? A) currency B) shares of stock C) short-term treasury bonds D) small denomination time deposits ANSWER A
Date: September 2nd, 2020
To find an economy’s long-run equilibrium price level, locate the point where ________ and ________ cross and look to the left. A) long-run aggregate supply; aggregate demand B) aggregate demand; short-run aggregate supply C) aggregate demand; price level D) demand; supply ANSWER A
Date: September 2nd, 2020
Assume that the supply curve for a commodity shifts to the right and the demand curve shifts to the left, and the shift in demand is greater than the shift in supply. Then, in comparison to the initial equilibrium, the new equilibrium will be characterized by: A) a lower price and a higher quantity. B) […]
Date: September 2nd, 2020
Which of the following statements is true of Malthus’s theory? A) Malthus suggested that fertility level of the population will remain constant over time. B) Malthus suggested that the life expectancy of the population will remain constant over time. C) Malthus suggested that in the long run, income levels will grow exponentially. D) Malthus suggested […]
Date: September 2nd, 2020
The government has decided to give every person in the U.S. a $5 coupon that they can use at the grocery store to purchase their choice of cheese. We would expect this policy to lead to A) an increase in aggregate demand but not equivalent to the full impact of all of the coupons redeemed […]
Date: September 2nd, 2020
To raise economic development, developing countries should A) focus on producing service goods. B) produce goods that are capital intensive and not labor intensive. C) not focus on economic growth. D) focus on their comparative advantage. ANSWER D
Date: September 2nd, 2020
The part of consumption that does not depend upon the level of disposable income is A) autonomous consumption. B) savings. C) average propensity to consume. D) saving. ANSWER A
Date: September 2nd, 2020
