Real consumption is a function of real disposable income, but the simple Keynesian model uses real GDP instead of real disposable income. This is appropriate since
A) we cannot measure either exactly and the purpose of the exercise is theoretical only.
B) real disposable income tends to move proportionately with real GDP.
C) real disposable income is a fixed percentage of real GDP.
D) real GDP is a fixed percentage of real disposable income.
B
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Technical and organizational change
A) typically reduces prices by increasing the supply of the product, ceteris paribus. B) typically reduces prices by decreasing the demand for the product, ceteris paribus. C) typically increases prices by increasing the demand for the product, ceteris paribus. D) typically increases prices by decreasing the supply for the product, ceteris paribus.
If one Mexican peso was worth 0.05 U.S. dollar, then one U.S. dollar would be worth:
a. 0.05 Mexican pesos. b. 0.05 U.S. dollars. c. 20 U.S. dollars. d. 20 Mexican pesos. e. 5 Mexican pesos.