Consider a closed economy without a government and without international trade. What will be TRUE when this economy is in equilibrium?
A. Total planned real investment spending will exceed total planned real expenditures.
B. Planned real consumption spending plus planned real investment spending equals real GDP.
C. Planned real investment spending will exceed real planned saving.
D. Planned real consumption spending equals real GDP.
Answer: B
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Suppose there are economies of scale in the production of a specialized memory chip that is used in manufacturing microwaves. This suggests that the microwave industry is a decreasing-cost industry
Indicate whether the statement is true or false
__________ are backup or secondary plans to be used in case the first plan does not work out
a. Unilateral b. Directional c. Multilateral d. Contingency
Capital is _______________
A. the crucial element in every economic system. B. the key to every society's standard of living. C. the result from savings. D. All of these statements describe capital.
Which of the following would be most likely to increase transaction costs?
a. A new mall opens bringing together area merchants at one location. b. A city ordinance bans large superstores in order to protect small, local businesses. c. A canal is constructed, allowing ships to reduce travel time by 50 percent. d. A website quickly connects new students to people who are seeking roommates.