Errors Made by Researchers Using the Long-Term Estimate of the Marginal

question 41

Multiple Choice

Errors made by researchers using the long-term estimate of the marginal propensity to consume to predict short-term movement in consumption can be extremely large. It is important, therefore, to understand when those errors might occur. If you were to draw the simple Keynesian consumption with MPC = 0.94 on a piece of graph paper, then you would expect to plot

• A) the combination of consumption and GDP for 1973 above the line.
• B) the combination of consumption for 1983 below the line.
• C) the combination of consumption and GDP for 1975 above the line.
• D) the combination of consumption and GDP for 1946 below the line.
• E) none of the above.

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Definitions:

Amines

Organic compounds and functional groups that contain a basic nitrogen atom with a lone pair.

Genetic Material

The molecules responsible for inheritance and the biological characteristics of organisms, primarily DNA (deoxyribonucleic acid) and RNA (ribonucleic acid).

DNA

The molecule that carries genetic instructions used in the growth, development, functioning, and reproduction of all known living organisms and many viruses.

Zygote

The initial cell formed when a new organism is produced by sexual reproduction, resulting from the union of sperm and egg cells.