Economic growth occurs when there is A) lower taxes on individuals. B) growth in government spending. C) growth in technology that increases productivity. D) more environmental regulation. ANSWER C
Date: September 2nd, 2020
The ratio of the change in consumption to the change in disposable income is the A) average propensity to save. B) marginal propensity to consume. C) average propensity to consume. D) marginal propensity to save. ANSWER B
Date: September 2nd, 2020
“The level of employment in an economy determines its real GDP, other things held constant.” Do you agree or disagree? Why? What assumptions are necessary for your conclusion based on the classical model? What will be an ideal response? ANSWER Agree. Production requires workers so the more workers that are employed the greater total […]
Date: September 2nd, 2020
Explain the term “free riders.” What will be an ideal response? ANSWER Free riders are people who don’t contribute but still benefit from the actions that others undertake. Sometimes people pursue their own private interests and don’t contribute voluntarily to the public interest, and this causes free riding. For example, a free rider may […]
Date: September 2nd, 2020
A patent is a government protection that gives A) monopolies the right to be sole producers due to economies of scale. B) consumers the right to sue when products are unsafe. C) companies the right to produce any good they choose. D) inventors exclusive rights to their product for a time. ANSWER D
Date: September 2nd, 2020
Free trade A) helps economic growth by increasing tariffs. B) hurts economic growth because foreigners are not bound by the same patent laws as we are. C) helps economic growth by encouraging the sharing of technology and industrial ideas. D) hurts economic growth because foreign countries can produce goods with lower labor costs. ANSWER […]
Date: September 2nd, 2020
In the above table, the marginal propensity to save is A) 0.6. B) 0.8. C) 0.2. D) 0.4. ANSWER C
Date: September 2nd, 2020
The curve that displays total planned real spending on goods and services at each price level by households, businesses, the government, and foreign residents is called A) the employment curve. B) the aggregate demand curve. C) the price level curve. D) the aggregate supply curve. ANSWER B
Date: September 2nd, 2020
An expected increase in the market price of oil in the coming year is likely to: A) shift the supply curve of oil to the right in the current year. B) shift the demand curve for oil to the left in the current year. C) cause no changes in the demand and supply curves of […]
Date: September 2nd, 2020
The marginal propensity to consume is calculated by A) dividing the change in income by the change in consumption. B) dividing income by consumption. C) dividing consumption by income. D) dividing the change in consumption by the change in income. ANSWER D
Date: September 2nd, 2020
