Does the saving and investment equation imply that a country's national saving must always equal its domestic investment? Explain
What will be an ideal response?
No. In an open economy, the saving and investment equation implies that a country's national saving must always equal domestic investment plus net foreign investment.
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If two goods, "x" and "y", are perfect substitutes, then which of the following best represents the utility function for the two goods?
A) U = x + y B) U = x ? y C) U = x2 + y2 D) Any of the above.
The Clinton administration has recommended an increase in the tax on yachts to help pay for government programs. Which of the following is true?
A) The burden of this tax will fall entirely on yacht consumers. B) The burden of this tax will fall entirely on yacht manufacturers. C) The sales of yachts will decrease. D) The profit of yacht manufacturers will increase. E) Employment of workers in the yacht industry will increase.
When the opportunity cost of producing carrots increases as more carrots are produced, then:
a. no more carrots will be produced. b. resources are equally suited to the production of carrots and to other goods. c. the production possibilities curve is a straight line. d. the production possibilities curve becomes positively sloped. e. the law of increasing costs is present.
Which of the following is not held constant when considering the demand for pizza?
A. Expectations of higher prices for pizzas. B. Consumer incomes. C. The price of spaghetti (a substitute). D. The price of pizza.