Japan has a fairly high saving rate and the level of saving in Japan is above domestic investment. Use the saving and investment equation to explain what Japan is doing with this excess of saving above domestic investment
What will be an ideal response?
In an open economy, the saving and investment equation implies that a country's national saving must always equal domestic investment plus net foreign investment or (S = I + NFI). Japan's saving in excess of domestic investment implies that net foreign investment is positive for Japan so that Japan must be investing in other countries. Companies like Toyota, Honda, and Nissan have built plants in the United States.
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A period of expansion in the business cycle ends when
A) the business cycle reaches its peak. B) the business cycle reaches its trough. C) real GDP is less than potential GDP. D) real GDP is equal to potential GDP.
If a union wishes to maximize the number of union members employed, it will
A) accept the competitive wage. B) set a wage below the competitive wage. C) set a wage where the elasticity of demand for labor equals one. D) set a wage above the competitive wage.
Compared with generic products, a brand name:
a. reduces the price elasticity of demand and gives a firm more market power. b. increases the price elasticity of demand and gives a firm more market power. c. increases the price elasticity of demand and gives a firm less market power. d. reduces the price elasticity of demand and gives a firm less market power. e. has no effect on price elasticity of demand or market power.
The tax cut of 2001 turned out to be well-timed because it caused a
A. rightward shift of the aggregate demand curve. B. rightward shift of the aggregate supply curve. C. leftward shift of the aggregate demand curve. D. leftward shift of the aggregate supply curve.