Less of an economy's resources will be channeled into building new factories and equipment when:
a. interest rates are high
b. households decide to save more of their income.
c. firms are optimistic about their future profits.
d. aggregate income increases.
e. an economy has a trade deficit.
a
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The United States has a comparative advantage and specialize in the production of airplanes. Compared to the situation with no trade, which of the following will occur?
A) More airplanes will be produced in the United States. B) There will be no change in the price of airplanes in the United States. C) The world price of airplanes will increase. D) The quantity of airplanes demanded in the United States will increase.
In 1995, the General Agreement on Tariffs and Trade (GATT) was replaced by the World Trade Organization (WTO)
Indicate whether the statement is true or false
As a result of specialization and trade, individuals no longer have to make choices about how to spend their incomes.
Answer the following statement true (T) or false (F)
When graphing the consumption function, we include a 45-degree reference line. What is TRUE at the points at which the consumption function crosses this line?
A. Planned real consumption spending is zero. B. Planned real saving is zero. C. Real disposable income is zero. D. Real GDP is zero.