On the graph above, assuming that G = 0 and NX = 0, saving is above planned investment at point ________
A) A
B) B
C) G
D) H
E) none of the above
C
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Optimal decisions are made at the point where marginal benefit is maximized
Indicate whether the statement is true or false
Suppose milk and cereal are compliments and the demand for milk is Qdm = 40 - 6Pm - 2Pc, where Qdm stands for millions of gallons of milk demanded, Pm stands for the price of milk and Pc stands for the price of cereal. The supply of milk is Qsm = 6Pm - 8, where Qsm stands for millions of gallons of milk supplied. The demand and supply of cereal are Qdc = 90 - 5Pc - Pm and Qsc = 5Pc - 10, respectively, where Qdc stands for millions of boxes of cereal demanded and Qsc stands for millions of boxes of cereal supplied. What is the general equilibrium quantity of milk?
A. 6.22 million gallons B. 1.48 million gallons C. Zero gallons D. 50.56 million gallons
"Mediocre economists often consider only the immediate direct effects of a change, whereas a good economist will also consider indirect effects that may only become observable over time." This statement most clearly emphasizes
A) the law of comparative advantage. B) economizing behavior. C) the importance of secondary effects. D) the gains derived from voluntary exchange.
In Figure 1.1, which labeled point indicates that there are sufficient resources and technology to produce the combination of goods represented by that point?
A. only A B. only B and C C. only D D. A, B, and C