Refer to the information provided in Figure 23.3 below to answer the question(s) that follow.
Figure 23.3Refer to Figure 23.3. Which of the following statements is true?
A. Aggregate saving is negative for all income levels below $400.
B. Saving is negative at all income levels below $200.
C. For all aggregate income levels above $200, aggregate consumption is greater than aggregate income.
D. If consumption is the only expenditure, this economy would be in equilibrium at an aggregate income level of $300.
Answer: B
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The one type of expenditure that we assume can differ from what spenders have planned is
A) consumption. B) investment. C) government expenditure. D) net exports.
When a permanent negative supply shock hits the economy ________
A) in the long-run, output is permanently lowered whether the central bank reacts or not B) inflation decreases in the short-run C) there is no long-run effect on inflation whether the central bank reacts or not D) all of the above E) none of the above
Suppose $1 = 0.85 euros in New York, 1 euro = 150 yen in Paris, and 1 yen = $0.008 in Tokyo.a. If you begin by holding $1, how could you profit from these exchange rates? What is your arbitrage profit per dollar initially traded?b. Identify the forces at work that will make the exchange rates consistent with each other in this situation. That is, what forces will lead to a situation in which no profitable arbitrage is possible?
What will be an ideal response?
Much of the growth in Southeast Asia is due to ________, and many African nations have based their growth on ________.
A. increased tourism; foreign aid B. service exports; manufactured exports C. export-manufacturing; resource extraction D. trade restrictions; free trade