According to the classical model, more saving leads to more investment because
A) the people who save are the same people who invest.
B) the interest rate adjusts to keep investment equal to saving.
C) saving and investment are two sides of the same activity.
D) the interest rate is set by the federal government.
B
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Refer to Figure 27-1. Suppose the economy is in short-run equilibrium above potential GDP and wages and prices are rising
If contractionary policy is used to move the economy back to long run equilibrium, this would be depicted as a movement from ________ using the static AD-AS model in the figure above. A) B to A B) A to E C) C to B D) E to A E) D to C
Home price escalation in the U.S. during 2005 fueled booms in
A. Iraq and Afghanistan. B. mortgage foreclosures and home demolition. C. home building and home equity lines of credit. D. stocks of dot com startups in Silicon Valley and U.S. government bonds.
Spending on programs that ________, such as Social Security and Medicare, is classified as entitlement and mandatory spending.
A. is authorized by Congress on an annual basis B. has been authorized by prior law C. is authorized only in times of budget surpluses D. is authorized only in times of budget deficits
As technology advances,
A) all opportunity costs decrease. B) the PPF shifts outward. C) a country moves toward the midpoint along its PPF and can produce more of both goods. D) all opportunity costs increase. E) the PPF shifts inward because unemployment occurs.