As disposable income decreases, consumption:
A. decreases.
B. may either increase or decrease depending on the wealth effect.
C. may either increase or decrease depending on the mpc.
D. increases.
Answer: A
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If firms in a monopolistically competitive market are earning economic profits, which of the following scenarios best reflects the change a representative firm experiences as the market adjusts to its long-run equilibrium?
A) Demand decreases and becomes less elastic. B) Demand increases and becomes less elastic. C) Demand increases and becomes more elastic. D) Demand decreases and becomes more elastic.
If you purchase a $100,000 interest-rate futures contract for 105, and the price of the Treasury securities on the expiration date is 108, your ________ is ________
A) profit; $3000 B) loss; $3000 C) profit; $8000 D) loss; $8000