Assume that in a private closed economy consumption is $240 billion and investment is $50 billion, both at the $280 billion level of domestic output. Thus:
A. saving is $10 billion.
B. unplanned decreases in inventories of $10 billion will occur.
C. the MPC is .80.
D. unplanned increases in inventories of $10 billion will occur.
B. unplanned decreases in inventories of $10 billion will occur.
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A manager believes there is a 10 percent chance their firm will have to pay $1,000,000 and a 90 percent chance they will be found innocent and pay nothing except the legal fees of $200,000. If the manager chooses to not settle for $300,000 and to enter the litigation instead, which of the following is true?
A) The manager is a risk lover. B) The manager is risk averse. C) The manager is risk neutral. D) The manager is risk intolerant.
Which of the following is a characteristic of a pure command economy?
a. all resources are privately owned b. economic activity is coordinated by the price system c. competitive markets guide resources to their highest-valued uses d. centralized economic planning is used to answer the basic economic questions e. economic choices are voluntary and are based on rational self-interest
Which type of unemployment is most likely to fall as a result of government policies that stimulate aggregate demand?
a. frictional unemployment b. structural unemployment c. natural unemployment d. cyclical unemployment
What does it mean for a country to have a comparative advantage in producing a product?
What will be an ideal response?