Consider an economy where Y = $3,500 . C = $500 + (0.80Y), and where autonomous investment is equal to $200. a . Is this economy in equilibrium? Explain. b. What will happen if people try to increase their saving to $400
a . The economy is in equilibrium because C = $3,300 and I = $200 . Together, C + I = $3,500 . Notice that
intended investment and saving are equal since S = Y – C = $3,500 – $3,300 = $200.
b. If people try to increase their saving to $400 . then actual investment, which always equals saving, will
exceed intended investment. This will cause the equilibrium national income level to fall as firms react
to unplanned inventory investment by reducing production.
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Which of the following cause the unemployment rate as measured by the Bureau of Labor Statistics to understate the true extent of joblessness?
A) inflation B) unemployed persons falsely report themselves to be actively looking for a job C) discouraged workers D) people employed in the underground economy
Which of the following estimates how quickly an economy grows?
a. An isoquant curve b. An aggregate production function c. The rule of 70 d. The rule of law
In January the price of widgets was $1.00, and Wendy's Widgets produced 80 widgets. In February the price of widgets was $1.50, and Wendy's Widgets produced 110 widgets. In March the price of widgets was $2.00, and Wendy's Widgets produced 140 widgets. The price elasticity of supply of Wendy's Widgets was about
a. 0.79 when the price increased from $1.00 to $1.50 and 0.84 when the price increased from $1.50 to $2.00. b. 1.27 when the price increased from $1.00 to $1.50 and 1.19 when the price increased from $1.50 to $2.00. c. 0.79 when the price increased from $1.00 to $1.50 and 1.19 when the price increased from $1.50 to $2.00. d. 1.27 when the price increased from $1.00 to $1.50 and 0.84 when the price increased from $1.50 to $2.00.
Refer to the above information. The marginal benefits of crime control for Level Two are:
a. $10,000 b. $40,000 c. $50,000 d. $200,000