If you know that a country's net foreign investment is positive, what does that tell you about the relationship between the country's national saving and private investment? (Assume that the capital account is zero and net transfers are zero.)
What will be an ideal response?
For any country, national saving must equal investment, where investment is the sum of domestic private investment and net foreign investment (S = I + NFI). Rearranging the saving and investment equation, NFI = S - I, so that if a country has positive net foreign investment, it must be saving more than it is investing domestically.
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Refer to Figure 7.1. At output level Q2
A) average fixed cost is increasing. B) average variable cost equals average fixed cost. C) marginal cost is negative. D) average total cost is negative. E) none of the above
Rationing through the price system
A) leads to an inefficient use of available resources. B) leads to high prices. C) works only with government interference. D) leads to an efficient use of available resources.
Economic stagnation coupled with high inflation is commonly called:
A. stagflation. B. inflationary stagnation. C. stagnatory growth. D. inflagnation.
For a firm facing a downward sloping demand curve, marginal revenue
A) is at a minimum at the midpoint of the demand curve. B) is greater at higher prices than at lower prices. C) increases each time prices are lowered. D) falls each time prices are raised.