The market system is also called the price system because
A) rising prices are the signal to producers to offer more of a particular good.
B) people pay money in markets.
C) everything has a price tag.
D) inflation is a significant problem.
Answer: A
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According to the saving and investment equation, if net foreign investment rises by $60 million
A) national saving will fall by $60 million. B) private saving will fall by $60 million. C) national saving will increase by $60 million. D) domestic investment will rise by $60 million.
The term oligopoly indicates:
A. a one-firm industry. B. many producers of a differentiated product. C. a few firms producing either a differentiated or a homogeneous product. D. an industry whose four-firm concentration ratio is low.
All of the following are advantages of a corporation EXCEPT
A. unlimited life. B. limited liability. C. double taxation. D. ability to raise large sums of financial capital.
If the average propensity to consume is 1.0, the marginal propensity to consume is 0.8, and real disposable income increases by $100, the additional saving is
A) $0. B) $20. C) $80. D) $100.