What is investment in a closed economy if you have the following economic data?
Y = $10 trillion
C = $5 trillion
TR = $2 trillion
G = $2 trillion
A) $2 trillion
B) $3 trillion
C) $5 trillion
D) cannot be determined without information on taxes (T)
B
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
U.S. bank notes have no intrinsic value and yet are widely accepted as a medium of exchange. This is a result of:
a. Gresham's law. b. the use of money as a store of value. c. the fiduciary monetary system. d. the valuation of currency as commodity money. e. the gold and silver reserves of the Federal government that backs the currency.
Indonesians, for example, have a lower standard of living than Americans because they have a lower level of productivity
a. True b. False Indicate whether the statement is true or false
Developing countries do:
A. compete with one another for foreign investment, and this competition reduces the benefits from foreign investment. B. not compete with one another for foreign investment, because they have sufficient domestic saving to finance their investment needs. C. not compete with one another for foreign investment, because they lack the infrastructure to attract it in the first place. D. compete with one another for foreign investment, but this competition is beneficial to developing countries because it insures a more efficient allocation of resources.