If injections exceed leakages,
A. The economy will expand.
B. Unemployment will rise.
C. Disposable income will fall.
D. Prices will fall.
Answer: A
You might also like to view...
Refer to Figure 8A.2. An increase in the saving rate is represented by
A) a movement from e2 to e1. B) shifting from s1Y to s2Y. C) a movement from K1 to e1. D) shifting from s2Y to dK.
Average product is equal to
A) marginal product + total product. B) total product ÷ marginal product. C) total product ÷ quantity of labor. D) total product × quantity of labor. E) marginal product × quantity of labor.
If one country's wage level is very high relative to the other's (the relative wage exceeding the relative productivity ratios), then if they both use the same currency
A) neither country has a comparative advantage. B) only the low wage country has a comparative advantage. C) only the high wage country has a comparative advantage. D) consumers will still find trade worth while from their perspective. E) it is possible that both will enjoy the conventional gains from trade.
Suppose that at current consumption levels an individual's marginal utility of consuming an extra hot dog is 10 whereas the marginal utility of consuming an extra soft drink is 2 . Then the MRS (of soft drinks for hot dogs)—that is, the number of hot dogs the individual is willing to give up to get one more soft drink—is:
a. 5. b. 2. c. 1/2. d. 1/5.