Use the equations for public and private saving to demonstrate how total saving in the economy equals investment
What will be an ideal response?
Private saving is equal to Y + TR - C - T, and public saving is equal to T - G - TR. Adding private saving and public saving together yields (Y + TR - C - T) + (T - G - TR) = Y - C - G. In a closed economy (with no net exports), Y= C + I + G, so Y - C - G = I, and the sum of public and private saving is equal to investment.
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A doctor sets up a private practice in small town where he faces no other competitors. In spite of his monopoly position why is he not guaranteed to make a profit?
What will be an ideal response?
The Cold War was of overriding importance during the period after World War II for all of the following reasons except
(a) It was an automatic "pump primer" which helped keep spending levels high in the overall economy. (b) It helped fuel growth of key sectors of the economy, such as aircraft manufacturing and computers. (c) It fostered economic growth and urbanization in many parts of the nation where military bases and defense factories were built. (d) It put people to work who would otherwise have been unemployed because without high levels of defense spending, the economy almost certainly would have lapsed back into a depression like the one of the 1930s.
The panic of 1893 was caused by the Sherman Silver Act of 1890, which doubled the Treasury's monthly purchase rates to 4
5 million ounces of silver at current market prices and was eased when President Cleveland called for the Act's repeal on June 30, 1893. Indicate whether the statement is true or false
Lower real interest rates in the United States (relative to foreign real interest rates) will lead to a(n) ________________ of the dollar and a ______________ shift of the U.S. SRAS curve
A) appreciation; rightward B) appreciation; leftward C) depreciation; rightward D) depreciation; leftward