1. The slope of the consumption function is equal to

A. the change in consumption divided by the change in disposable income.

B. the change in consumption divided by the change in personal income.

C. the change in disposable income divided by the change in consumption.

D. the change in national income divided by the change in consumption.

2. Why has productivity growth in the U.S. been more rapid than in the other industrialized countries?

A Because of the greater flexibility of U.S. labor markets and the greater efficiency of the financial system.

B Because the U.S. government has more restrictive but also more effective regulations that makes the labor and output markets more efficient.

C Because the opportunity cost of being unemployed is lower in the U.S. than in other countries.

D All of the above.

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