In a closed economy private saving is $500 billion and the government budget deficit is $100 billion. What is investment?
$400 billion
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When import restrictions are placed on a good, and as a result the price of the good increases, the demand curve for that good will
A) shift rightward. B) shift leftward. C) become steeper. D) be unaffected.
Assume the economy is in recession and real GDP is below full employment. The marginal propensity to consume (MPC) is 0.50, and the government follows Keynesian economics by using expansionary fiscal policy to increase aggregate demand (total spending). If an increase of $1,000 billion aggregate demand can restore full employment, the government should:
a. increase spending by $250 billion. b. decrease spending by $500 billion. c. increase spending by $1,000 billion. d. increase spending by $500 billion.
Government failure means that government action reduces market efficiency
Indicate whether the statement is true or false
The speculative demand for money is associated with ___________ and, graphed with interest rate on the vertical axis and money on the horizontal, is ___________
a. classical economics; upward sloping b. classical economics; downward sloping c. monetarists; downward sloping d. Keynesian economics; downward sloping e. Keynesian economics; upward sloping