Explain why saving equals planned investment at equilibrium GDP.
What will be an ideal response?
It is based on the fact that saving is income not consumed. Saving therefore represents a “leakage” or diversion of potential spending from the income-expenditures stream. Consumption falls short of total output by the amount of saving. However, investment spending can be viewed as an “injection” into this income-expenditures stream. If planned investment is equal to the amount of saving at a particular level of GDP, then leakages equal injections and GDP will be in equilibrium.
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The U.S. Congress has given two government entities the authority to police mergers. These two entities are
A) the Antitrust Division of the U.S. Department of Justice and the Council of Economic Advisors. B) the antitrust division of the Department of State and the Securities and Exchange Commission. C) the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice. D) the Federal Trade Commission and the Internal Revenue Service.
Refer to above figure. If manufacturing labor were to increase to OmL2, how much value would the economy as a whole gain?
What will be an ideal response?
The second number in any ordered pair is
a. the x-coordinate. b. the y-coordinate. c. the horizontal location of the point. d. the slope.
If over a short time a large number of teenagers become old enough to find employment and a much smaller number of people retire, then productivity
a. and real GDP per person rise. b. rises but real GDP per person falls. c. falls but real GDP per person rises. d. and real GDP per person fall.