Based on our understanding of the paradox of saving, we know that a reduction in the desire to save will cause
A) an increase in equilibrium GDP.
B) a reduction in GDP.
C) an increase in the desire to invest.
D) no change in equilibrium GDP.
E) a permanent reduction in the level of saving.
A
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When a U.S. company shifts its call-center operations overseas to reduce costs, it is applying the economic concept of
A) using assumptions to simplify. B) thinking at the margin. C) comparative advantage. D) diminishing returns.
Which of the following is a dynamic game?
A) rock-paper-scissors (Roshambo) B) flipping pennies C) chess D) None of the above.
Witness the 1970s. Supply shocks such as the dramatic oil price increase explain
a. the fall in unemployment that occurred at the expense of stable prices b. the shift to the right of the aggregate demand curve c. what caused price levels and real GDP to increase d. why stagnation occurred e. why taxes, government spending, private consumption and investment increased
Describe the three different reasons that investment can rise. Explain how one of these three changes could be undesireable in terms of promoting the economic health and strength of the economy