Foreign saving is used for domestic investment when foreigners engage in
a. foreign direct investment.
b. foreign portfolio investment.
c. either foreign direct investment or foreign portfolio investment.
d. None of the above is correct.
c
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A member of a cartel like OPEC has an incentive to
A) support equal production quotas for each member. B) argue for larger production quotas for each member of the cartel. C) abide by its individual production quota. D) agree to a low cartel production level and then produce more than its quota.
According to the survivor principle
A) firms will get taken over by their larger rivals over time. B) only firms that maximize profits survive in highly competitive markets. C) managers only work hard if they are threatened with their survival at the firm. D) eventually all firms merge to become one large monopoly.
If households save $30 billion more at each level of income and the marginal propensity to consume (MPC) is 0.9, the aggregate expenditure line will _____
a. intersect the 45-degree line at a real GDP of $30 billion b. shift upward by $30 billion c. shift downward by $30 billion d. shift upward by $300 billion because of the multiplier effect e. shift downward by $300 billion because of the multiplier effect
Suppose studies showed that 12 percent of all teens choose to participate in underage drinking. If policymakers wish to reduce the amount of underage drinking, they should:
A. not share that statistic, and let teens think that it's a huge problem with all teens. B. let teens know that the great majority of teens currently do not drink. C. Informing them will have no impact on their individual behavior. D. The statistic is likely to influence their personal decision, but it is impossible to predict in what way without more information.