If private savings equals $1.2 billion and private investment equals $1.5 billion, then there is a
A) current account balance.
B) government sector deficit.
C) private sector deficit.
D) private sector surplus.
E) government sector surplus.
C
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The classical economists argued that the production of goods and services (supply) generates an equal amount of total income and, in turn, total spending. This theory is called:
a. Keynes' General Theory. b. Say's Law. c. the "animal spirits" theory. d. the law of autonomous consumption.
A monopolistic competitor maximizes profit by producing 600 units of output at a price of $24 per unit. If the average cost of production is $18, the monopolistic competitor earns a profit of:
a. $3,600. b. $2,400. c. $6,000. d. $1,800.
If the United States threatens to impose a tariff on Colombian coffee if Colombia does not remove agricultural subsidies, the United States will be
a. better off regardless of how Colombia responds. b. better off if Colombia removes the subsidies, and will be no worse off if it doesn't. c. worse off if Colombia doesn't remove the subsidies in response to the threat. d. worse off regardless of how Colombia responds.
If the cross price elasticity of demand between two commodities is positive, then these commodities are
A) are superior. B) are complements. C) are substitutes. D) are inferior.