Suppose that a consumer has a marginal propensity to consume of 0.7. If this consumer earns an extra €2, her consumption spending would be expected to increase by:

If the price of X falls, the budget constraint

a. shifts outward in a parallel fashion. b. shifts inward in a parallel fashion. c. rotates outward about the X-intercept. d. rotates outward about the Y-intercept.

If we assume that a unit of capital will last indefinitely, the marginal rate of return on investment equals the marginal revenue product of capital divided by its marginal resource cost

a. True b. False