If net foreign investment in the United States is positive, how must national saving and domestic investment be related? (Assume that the capital account is zero and net transfers are zero.)
A) Domestic investment can be greater than or less than national saving.
B) Domestic investment must be greater than national saving.
C) Domestic investment must be less than national saving.
D) Domestic investment and national saving must also be positive.
C
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The main function of the Federal Reserve System is to
A. clear checks from member banks. B. set reserve requirements of banks. C. control the money supply. D. serve as the fiscal agent for the federal government.
The price elasticity of demand for furniture is estimated at 1.3. This value means a one percent increase in the
A) price of furniture will increase the quantity of furniture demanded by 1.3 percent. B) price of furniture will decrease the quantity of furniture demanded by 1.3 percent. C) quantity of furniture demanded will decrease the price of furniture by 1.3 percent. D) quantity of furniture demanded will increase the price of furniture by 1.3 percent.
State the fundamental identity of national income accounting. Why is it not possible for this identity to be violated?
What will be an ideal response?
Suppose you're in the trucking business and you purchase a $100,000 truck with a one year loan for the full amount. Ignoring interest payments, what is your fixed cost per month?
a. $10,000 b. $20,000 c. $25,000 d. $12,000 e. $8,333