In a simple economy (no government or foreign trade), the vertical distance between the consumption function and the expenditure schedule measures
a) undesired investment
b) undesired inventory depletion
c) planned investment
d) unintended investment
Answer: c) planned investment
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Suppose notebooks are produced by a competitive constant-cost industry. Which of the following must cause Nanna's Notebooks to exit the industry in the long run?
a. Nanna's is notified of a rent increase, but her competitors' rents are unchanged. b. A fire destroys half of Nanna's inventory. c. A photographer wins a $10,000 judgment from a lawsuit charging that Nanna's used his photos on notebook covers without permission. d. The price of cardboard used in notebook production rises.
Money has to be a precious metal, since precious metals have all of the important characteristics of money
Indicate whether the statement is true or false
Anne has just purchased a new house in a lovely neighborhood. Her neighbors are friendly and even brought her house-warming gifts. Anne, however, has a problem. Her neighbors have cats, and Anne hates cats. Even though the city has a law requiring all
outdoor pets to be on a leash, her neighbors ignore it, and the cats roam all over Anne's property. How would an economist describe this situation? Is there anything Anne can do?
If a competitive firm is currently producing a level of output at which marginal cost exceeds marginal revenue, then
a. a one-unit increase in output will increase the firm's profit. b. a one-unit decrease in output will increase the firm's profit. c. total revenue exceeds total cost. d. total cost exceeds total revenue.