If, in a closed economy, real GDP is $30 billion, consumption is $20 billion, and government purchases are $5 billion, what is total saving in the economy?
A) $5 billion
B) $15 billion
C) $45 billion
D) $55 billion
Answer: A
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"We offer the best deal in town. If somebody charges a lower price, bring in their ad and we'll beat it!" From the economic point of view, the firm promising to match its competitor's low prices is attempting to
A) lie. B) cheat. C) learn more about the market. D) do nothing more than bait and switch their customers.
The marginal propensity to consume is:
a. the change in disposable income divided by the change in consumption. b. consumption spending divided by disposable income. c. disposable income divided by consumption spending. d. the change in consumption divided by the change in disposable income. e. the change in consumption divided by disposable income.
Both foreign direct investment and foreign portfolio investment by U.S. residents increase U.S. net capital outflow
a. True b. False Indicate whether the statement is true or false
If the price level increases, then
A. domestic goods are more expensive relative to foreign goods, which reduces total planed real expenditures. B. foreign residents buy fewer U.S. goods, leaving more goods for U.S. residents and an increase in total planned real production by firms. C. the exchange rate will increase, causing U.S. goods to become cheaper and increasing total planned real expenditures. D. imports increase but exports do not change. Therefore, there is no effect on total planned real expenditures.