Saving is NOT a problem in the classical model because
A. saving would be spent by consumers eventually.
B. interest rates are flexible, and savings were channeled into investment.
C. the classical economists assume that saving was beneficial to people for retirement.
D. savers and investors are the same people.
Answer: B
You might also like to view...
Answer the following statements true (T) or false (F)
1. All goods and services produced during the year are added to the total wealth of the nation. 2. Stocks and bonds are counted as part of total wealth. 3. To understand the purpose of a given economic policy, it is necessary to understand the influence of political and social policies. 4. Economics is an isolated science since it has no relation to other sciences.
The implicit cost of ownership:
A. is the monetary opportunity cost that is often overlooked. B. is a cognitive bias. C. is an unproven concept. D. All of these are true.
When the price of a video rental was $2.00, ticket sales at the local movie theatre averaged 180 admissions per night. Then the video store reduced the price of a video rental to $1, and the theatre manager reported that ticket sales had fallen to 126 per night. What is the approximate value of the cross price elasticity of demand between video rentals and theatre tickets?
A. +1.67 B. +0.53 C. -0.53 D. +0.30
The relationship between changes in income and purchase of a good indicates
a. whether the good is a luxury or necessity. b. whether the good is normal or inferior. c. whether the good is a complement or substitute. d. Both a and b.