Saving is not a problem in the classical model because
A) savers and investors are the same people.
B) interest rates are flexible, and savings were channeled into investment.
C) the classical economists assume that saving was beneficial to people for retirement.
D) saving would be spent by consumers eventually.
B
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Which of the following is part of a firm's opportunity costs? I. wages II. utility costs III. interest on a bank loan IV. interest forgone on funds used to buy capital equipment
A) I and II B) III and IV C) I, II and III D) I, II, III and IV
Price elasticity of demand is defined as: a. the slope of the demand curve
b. the slope of the demand curve divided by the price. c. the percentage change in price divided by the percentage change in quantity demanded. d. the percentage change in quantity demanded divided by the percentage change in price.
Refer to the above data. If the consumer's money income were cut from $52 to $28, she would maximize her satisfaction by purchasing:
A) 3 units of J and 3 units of K. B) 1 unit of J and 3 units of K. C) 4 units of J and 1 unit of K. D) 2 units of J and 3 units of K.
Which of the following is a wealth effect that would most likely cause a decrease in the quantity of real GDP demanded in a nation, ceteris paribus?
a. France experiences a decrease in the general level of prices in its economy. b. South African consumers become richer following a decline in the overall price level. c. The Mexican economy experiences several years of increasing price levels. d. U.S. consumers are encouraged to spend more due to low interest rates.