The marginal propensity to consume (MPC) is computed as the change in consumption divided by the change in:
a. GDP.
b. income.
c. saving.
d. none of these.
QUESTION 2Monetarists accept the idea that velocity is not constant; nonetheless, they believe that it is still highly:
a. constant.
b. unpredictable, ill-behaved, and independent of money supply.
c. unpredictable, well-behaved, and dependent of money supply.
d. predictable.
e. variable.
QUESTION 3Cyclical unemployment is caused by:
a. shifts in the job skills required in the economy.
b. seasonal layoffs.
c. declines in real GDP.
d. cyclical changes in the job skills among workers.
QUESTION 4If your income increases from 33,000 to 41,000 and your consumption increases from 8,000 to 12,000 . your marginal propensity to consume (MPC) is:
a. 0.2.
b. 0.4.
c. 0.5.
d. 0.8.
e. 1.0.
QUESTION 5According to the quantity theory of money, if M's growth is lower than Q's, then:
a. V falls.
b. V rises.
c. P stays the same
d. P falls.
e. P rises
QUESTION 6Cyclical unemployment is primarily caused by:
a. a large proportion of youthful workers in the labor force.
b. fluctuations in aggregate demand.
c. a lack of training on the part of job seekers.
d. the failure of job seekers to search adequately for the available jobs.
QUESTION 7If your income increases from 30,000 to 35,000 and your consumption increases from 11,000 to 12,000 . your marginal propensity to consume (MPC) is:
a. 0.2.
b. 0.4.
c. 0.5.
d. 0.8.
e. 1.0.