Suppose the marginal propensity to consume is 0.80 and taxes decrease by $10 billion. Which of the following is true?
a. Disposable income and consumption fall by $10 billion
b. Disposable income and consumption rise by $10 billion
c. Disposable income rises by $10 billion and consumption rises by $8 billion
d. Disposable income falls by $10 billion and consumption falls by $8 billion
e. Disposable income rises by $10 billion and consumption falls by $8 billion
C
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In the figure above, with the rent ceiling
A) there is a shortage of 3,000 units. B) there is a surplus of 3,000 units. C) there is a surplus of 2,000 units. D) there is a shortage of 1,000 units. E) the market is in equilibrium.
The figure above provides information for a factory that produces chemicals that pollute a waterway. The waterway is used by water skiers. The efficient quantity of chemicals to produce is ________ tons of chemicals a week
A) 1 ton B) as many tons as possible C) 3 tons D) 5 tons