In a simple economy (no government sector), the equilibrium level of GDP will be less than the full employment level of income if, at the full employment level of income, the
a. saving that consumers want to do is less than investing that businesses want to do.
b. saving that consumers want to do is greater than investing that businesses want to do.
c. saving that consumers want to do is less than spending that consumers want to do.
d. inventories are being depleted.
b
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As a knowledgeable investor in 2007, you should have realized that as interest rates fell, bond prices would
a. also fall. b. rise. c. become more volatile, like stock prices. d. fall but not by as much as stock prices.
Stock prices fell throughout much of 2007 and 2008 and many investors decided to switch their funds into the bond market. What only about 30 percent of surveyed investors knew was that as bond prices rise, interest rates
A. fall in reaction to the increased demand for bonds. B. fall in reaction to the decreased demand for bonds. C. rise in reaction to the increased demand for bonds. D. rise in reaction to the decreased demand for bonds.
Cross elasticity of demand measures how sensitive purchases of a specific product are to changes in:
A. the price of some other product. B. the price of that same product. C. income. D. the general price level.
Which of the following is an example of a normative question?
A. How will an increase in the inheritance tax affect tax revenues? B. What fraction of an income tax cut will be spent on imported goods? C. Should Florida implement a state income tax to reduce its deficit? D. How will an increase in unemployment benefits affect the unemployment rate?