Write down the national savings and investment identity.
What will be an ideal response?
Supply of Financial Capital = Demand for Financial Capital
The supply of financial capital includes savings by individual and firms and the inflow of financial capital from foreign investors or trade deficit. The demand for financial capital includes the private investment sector and government borrowing.
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One reason governments impose taxes is to ________
A) reduce the number of transactions in an economy B) redistribute funds via transfer payments C) increase competition among producers D) increase the volume of exports
A person’s decision to supply a certain amount of labor in a week is simultaneously a decision to consume a certain amount of leisure per week.
Answer the following statement true (T) or false (F)
(Advanced analysis) Answer the question on the basis of the following information. The demand for commodity X is represented by the equation P = 100 - 2Q and supply by the equation P = 10 + 4Q. Refer to the given information. If demand changed from P =
100 - 2Q to P = 130 - Q, the new equilibrium price is: A. $90. B. $110. C. $96. D. $106.
International market failures:
A. are equally likely to be solved in the presence or absence of a world government. B. are more likely to be solved in the presence of a world government. C. are less likely to be solved in the presence of a world government. D. do not occur in the presence or absence of a world government.