A given change in disposable income would have the smallest effect on consumption with which of the following marginal propensities to consume?

Keith is a perfectly competitive carnation grower. The market price is $2 per dozen carnations. Keith's average total cost to grow carnations is $2.50 per dozen. In the long run, Keith will

A) raise his price to more than $2.50 per dozen carnations. B) raise his price to $2.50 per dozen carnations. C) exit the industry if the price and his costs do not change. D) incur an economic loss. E) continue to make an economic profit.

Refer to Figure 15-10. In the figure above, suppose the economy is initially at point A. The movement of the economy to point B as shown in the graph illustrates the effect of which of the following policy actions by the Federal Reserve?

A) an open market sale of Treasury bills B) an open market purchase of Treasury bills C) an increase in income taxes D) a decrease in the required reserve ratio