A high marginal propensity to consume implies which of the following?
A) A small change in consumption when income changes
B) A high savings rate
C) A high marginal tax rate
D) An equilibrium level of income near full employment
E) A low marginal propensity to save
Ans: E) A low marginal propensity to save
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Assume you are holding Treasury securities and have sold futures to hedge against interest-rate risk. If interest rates fall
A) the increase in the value of the securities equals the decrease in the value of the futures contracts. B) the decrease in the value of the securities equals the increase in the value of the futures contracts. C) both the securities and the futures contracts decrease in value. D) both the securities and the futures contracts increase in value.
Suppose that the amount of computer printers demanded increases by 20 percent when the price of personal computers falls by 10 percent. The cross price elasticity of demand between computer printers and personal computers is
A) 0.5. B) -2.0. C) -0.5. D) 2.0.