When disposable income is zero, consumption expenditure is
A) also zero.
B) negative.
C) equal to induced consumption expenditure.
D) equal to autonomous consumption.
E) None of the above answers is correct.
D
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Most economists estimate that the U.S. factor of production most likely to be hurt by the formation of the NAFTA is unskilled U.S. labor
Indicate whether the statement is true or false
Economic theory states that losing comparative advantage in one good means creating a comparative advantage in another. This suggests that:
A. those who experience the transition may find it difficult in the short run. B. it canbe seen as a success in the short run. C. outsourcing willalways be good for every member of a society. D. in the long run people may not like it, but no one will complain in the short run.
Use the aggregate expenditures model and assume an economy is in equilibrium at $6 trillion which is $500 billion below full-employment GDP. If the marginal propensity to consume (MPC) is 0.75, full-employment GDP can be reached if government spending:
a. increases by $75 billion. b. increases by $125 billion. c. increases by $500 billion. d. is held constant.
A country has $40 billion of domestic investment and net capital outflows of -$20 billion. What is the country's saving?
a. -$60 billion b. -$20 billion c. $20 billion d. $60 billion