In an economy without a government and without international transactions, aggregate expenditure at each level of income is equal to:
a. consumption plus saving
b. planned investment plus saving.
c. disposable income plus the price level.
d. consumption plus planned investment.
e. planned investment minus saving.
d
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In an open economy with flexible exchange rates, monetary policy affects consumption and investment by changing the ________ and affects net exports by changing the ________.
A. growth of domestic real GDP; growth of foreign real GDP B. inflation rate; unemployment rate C. real interest rate; exchange rate D. exchange rate; real interest rate
Explain how gross investment, depreciation, net investment, and the capital stock are related
What will be an ideal response?
A decrease in population growth will lead to a ________ in the steady-state capital—labor ratio and a ________ in output per worker
A) fall; fall B) fall; rise C) rise; rise D) rise; fall
A positive externality is shown by a marginal social benefit (MSB) curve that is
A) above and to the right of the demand curve for the good that generates it. B) below and to the left of the demand curve for the good that generates it. C) above and to the left of the supply curve for the good that generates it. D) below and to the right of the supply curve for the good that generates it. E) positively related to both the supply curve and the demand curve for the good that generates it.