Answer the following statements true (T) or false (F)
1) The amount of investment in an economy is ultimately limited by the amount of savings in that economy.
2) Increasing investment in the present means forgoing future consumption.
3) A nation that wants to invest in more newly created capital in the present must be willing to
forgo present consumption.
4) Banks and other financial institutions provide the link between savers and economic investors
in the macroeconomy.
1) T
2) F
3) T
4) T
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Most students attending college pay tuition and are unable to hold a full-time job. For these students, tuition is
A) part of the opportunity cost of going to college. So are their forgone earnings from not holding a full-time job. B) part of the opportunity cost of going to college. Their forgone earnings from not holding a full-time job are not part of the opportunity cost of attending college. C) not part of the opportunity cost of going to college, but their forgone earnings from not holding a full-time job are part of the opportunity cost of attending college. D) not part of the opportunity cost of going to college. Neither are their forgone earnings from not holding a full-time job.
An economy in which output has decreased and prices have increased would suggest that there has been a:
A. negative demand side shock. B. negative supply side shock. C. positive demand side shock. D. positive supply side shock.
A decrease in the number of competitors in a monopolistically competitive market causes an increase in the price elasticity of demand for the output of each of the remaining firms in the market
Indicate whether the statement is true or false
Supply and demand analysis suggests that a sharp increase in the price of gasoline will cause the
a. price of fuel-efficient compact cars to decrease. b. supply of gasoline to decrease. c. demand for large luxury cars to increase. d. demand for fuel-efficient cars to increase.