In an open economy, national saving can be less than investment
a. True
b. False
Indicate whether the statement is true or false
True
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According to Keynesians, the primary source of business cycle fluctuations is
A) aggregate demand shocks. B) productivity shocks. C) oil price shocks. D) consumer confidence shocks.
In the context of the neoclassical growth model, which of the following does NOT explain the growth rates of countries which are initially poor?
A) nations which are below their steady-state growth paths will grow more slowly until they reach the steady state B) the rate of return is higher in poor countries C) capital flows from rich countries to poor countries D) the passage of time allows poor countries to adopt the productive techniques of rich countries.
Refer to the above figure. Suppose the current aggregate demand is represented by AD2. If aggregate demand falls to line AD3, then
A) the new equilibrium will be at j. B) the new equilibrium will be at k. C) the new equilibrium real Gross Domestic Product (GDP) will be x. D) a new price level will be established at a.
The only way by which government can affect aggregate demand is through changes in its own purchases
a. True b. False Indicate whether the statement is true or false