As disposable income increases, _____
a. consumption and saving both increase
b. consumption increases and saving decreases
c. consumption and saving both decrease
d. consumption decreases but saving increases
e. saving increases, but we cannot predict what happens to consumption
a
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Should countries specialize in producing goods and services based on having a comparative advantage or an absolute advantage? Why?
What will be an ideal response?
If in the long run a firm makes zero profit, it should exit the industry
Indicate whether the statement is true or false
For the economy as a whole: a. income must equal expenditures
b. expenditures exceed income because of taxes. c. income exceeds expenditures because of saving. d. expenditures exceed income because of the government budget deficit.
Which of the following activities are production?
A) combining flour, milk, and eggs to make cookies B) moving crude oil from one part of Texas to an oil refinery near the Texas coast C) taking ice cubes from a tray to put in a drink D) All of the above are production.