When the average propensity to save (APS) is 0.20, then this means A) people are spending 60 percent of their disposable income and investing the remaining 20 percent. B) people are spending 20 percent of their disposable income. C) people are spending 80 percent of their disposable income. D) people are saving $0.20 of the […]
Exponential growth implies that: A) relatively large differences in growth rates will translate into small differences in the level of a quantity after many years of growing. B) growth rates will alternate between positive and negative values in every consecutive time period. C) relatively small differences in growth rates translates into large differences in the […]
According to the new growth theory A) technology should be considered as a factor of production. B) technology is a natural by-product of invention. C) technology plays a minor role in economic development. D) technology provides few rewards to the society. ANSWER A
If the average propensity to consume is 0.8, then the average propensity to save is A) 0. B) 0.2. C) 0.8. D) 1. ANSWER B
The downward slope of the aggregate demand curve shows that A) a higher price level will cause planned purchase rates for final goods and services to be higher. B) an increase in aggregate demand reduces the long-run aggregate supply. C) a lower price level will cause planned purchase rates for final goods and services to […]
Consider two countries: A and B. In country A, the annual growth rate of GDP per capita is 2%, while in country B the annual growth rate of GDP per capita is 6%. At present, country B’s GDP per capita is higher than country A’s GDP per capita. Which of the following statements will then […]
The average propensity to consume (APC) equals A) the change in consumption expenditures divided by the change in real disposable income. B) real disposable income divided by consumption expenditures. C) the change in real disposable income divided by the change in consumption expenditures. D) consumption expenditures divided by real disposable income. ANSWER D
Refer to the table above. If at a price of $3 per loaf, the market supply of bread is 45 loaves, Seller 3’s supply is: A) 15 units. B) 24 units. C) 18 units. D) 20 units. ANSWER C
Which statement best characterizes the classical economists’ view of saving and investment? A) Saving exceeds investment. B) Saving is less than investment. C) Saving equals investment. D) Saving and investment are not related to one another. ANSWER C
Tax policy conducted for the purpose of achieving full employment, price stability, or economic growth is an example of A) discretionary fiscal policy. B) interest-rate policy. C) monetary policy. D) exchange-rate policy. ANSWER A
