Private saving is equal to:
A. income ? consumption.
B. income - consumption ? taxes.
C. income ? consumption ? government spending.
D. income ? consumption ? government spending ? taxes.
Ans: B. income - consumption ? taxes.
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For an individual LM curve, the money supply is assumed to
A) be constant. B) grow at a rate equal to the interest rate. C) grow at a rate equal to the growth rate in income. D) grow at a rate equal to the marginal propensity to consume.
The marginal productivity theory of distribution has been criticized because
a. it assumes that the existing distribution of ownership factors is fair and just when it may not be. b. it does not tell us much about real policy matters. c. a factor's MRP does not in any way correspond to productive effort. d. All of the above are correct.