If the marginal propensity to consume is 0.8, the marginal propensity to save is: A.​ 0.4. ​0.8 ​0.3. 1.2.​ E .0.2.

If the marginal propensity to consume is 0.8, the marginal propensity to save is:

A.​ 0.4.

1. ​0.8
2. ​0.3.
3. 1.2.​

E .0.2.​

The following table shows the rate of growth of five nations and the number of years required to double its output at various growth rates. B is expected to double its output in _____ years.

Table 12.1:

1. ​15
2. ​14
3. ​7 
4. ​10
5. 5

​The net national product (NNP) is the:

1. ​difference between gross domestic product and net income of foreigners.
2. ​difference between gross domestic product and depreciation.
3. difference between gross national product and depreciation
4. sum of gross domestic product and depreciation
5. ​sum of gross domestic product indirect business taxes

​Poor infrastructure is a major deterrent to economic growth. 

 True

 False

​Which of the following is a problem with using real gross domestic product (GDP) as a measure of economic well-being?

1. ​​It does not account for inflation
2. It does not account for production by foreign firms producing inside the domestic economy
3. It does not account for the value of services produced in the economy
4. ​It does not account for changes in purchasing power parity.
5. ​It does not account for production within the household

​An excess of government revenues over expenditures results in a budget deficit

 True

 False

​Allowing free trade can lead to greater output because of:

1. ​diseconomies of scale.
2. ​the rule of law
3. the principle of comparative advantage
4. ​the Rule of 70
5. the principle of absolute advantage.

A regressive tax

1. ​imposes a greater burden on those with higher incomes than on those with lower incomes
2. is based on the ability to pay principle
3. takes a greater percentage of the income of lower-income groups than of higher-income groups.
4. is based on the benefits received principle.
5. is considered to be the most equitable type of tax

​Fiscal policy is a plan for taxing and spending that is designed to steer an economy in a desired direction

 True

 False

​Suppose in 2009, the United States imported $1.5 billion worth of goods and services and sold $4 billion worth of goods and services outside its borders. Therefore, in 2009 net exports were:

1. $5.5 billion

​B. −$4.4 billion

1. $4.4 billion​
2. ​−$2.5 billion
3. ​$2.5 billion

​_____ shows roughly how long it will take a nation to double its output at various growth rates.

1. The GDP deflator
2. The rules of the game
3. ​The production possibilities curve
4. A per-worker production function
5. ​The Rule of 70

​Capital formation is a key component of economic growth.

 True

 False