Suppose that when disposable income increases by $1,000, consumption spending increases by $750. Given this information, we know that the marginal propensity to consume (MPC) is

If a firm has no ability to select the price of its product, it:

a. will go out of business due to losses. b. is a price-maker. c. cannot maximize profit. d. has a horizontal individual demand curve.

Tax distortions refer to the cost of inflation that comes from:

A. the money, time, and opportunity used to change prices to keep pace with inflation. B. the time, money, and effort one has to spend managing cash in the face of inflation. C. being penalized via taxes for making more money in dollars, even though real purchasing power hasn't changed at all. D. labor costs associated with inflation.