According to the classical model, more saving leads to more investment because
A. the people who save are the same people who invest.
B. the interest rate adjusts to keep investment equal to saving.
C. the interest rate is set by the federal government.
D. saving and investment are two sides of the same activity.
Answer: B
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Refer to Table 14-1. Let's suppose the game starts with each firm adhering to its original budget so that Godrickporter earns a profit of $6,000 and Star Connections earns a profit of $12,000
Is there an incentive for any one firm to increase its advertising budget? A) No, neither firm has an incentive to raise its advertising budget. B) Yes, Godrickporter has an incentive to increase its advertising budget, but Star Connections does not. C) Yes, Star Connections has an incentive to increase its advertising budget, but Godrickporter does not. D) Yes, both firms have an incentive to raise their advertising budgets.
Suppose that someone has a disposable annual income of $50,000 and an MPC=0.8. They allocate $10,000 of that for necessities. The remainder of the income is both spent and saved. Based on this information autonomous consumption is:
A. $10,000. B. $40,000. C. $32,000. D. $50,000.
In the Friedman-Phelps analysis, when inflation is less than expected, the unemployment rate is less than the natural rate
a. True b. False Indicate whether the statement is true or false
If a state government reduces property taxes for residents at the same time that it increases the state income tax, what will happen to the expenditures schedule of the residents of this state?
A. It shifts upward. B. It shifts downward. C. It becomes less steep. D. It becomes steeper. E. It does not change.