Assume that in a private closed economy consumption is $240 billion and investment is $50 billion, both at the $280 billion level of domestic output. Thus:
A. saving is $10 billion.
B. unplanned decreases in inventories of $10 billion will occur.
C. the MPC is .80.
D. unplanned increases in inventories of $10 billion will occur.
B. unplanned decreases in inventories of $10 billion will occur.
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Rational voter ignorance can lead politicians to: a. favor programs with immediate and clear benefits and unclear and deferred costs
b. fail to take all the benefits and costs of a program fully into account in deciding on which policies to favor. c. do a poor job of overseeing the actions of public sector bureaus. d. all of the above
Information asymmetry is a problem when:
A. a market is highly inefficient. B. a market is highly efficient. C. a buyer and seller have aligned incentives. D. a buyer and seller have opposing incentives.