John Maynard Keynes's central proposition that a dollar increase in disposable income would increase consumption, but by less than the increase in disposable income, means the marginal propensity to consume (MPC) is:
a. greater than or equal to one.
b. equal to one.
c. less than one, but greater than zero.
d. negative.
c
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An innovation that blurred the distinction between brokerage firms and commercial banks was Merrill Lynch's development in 1977 of the
A) cash management account. B) money market mutual fund. C) individual retirement account. D) discount brokerage.
Sheri is currently purchasing 10 units of a normal good and her indifference curves exhibit diminishing marginal rate of substitution. Suppose there is a decrease in the market price of this good. Then
A) both her utility and her consumer surplus will increase. B) her consumer surplus will increase, but her utility will remain the same. C) her utility will increase, but her consumer surplus will remain the same. D) her consumer surplus will increase, but the change in her utility is unknown without more information.