An inferior good is one for which an increase in income causes a(n)

If net foreign investment is positive, which of the following must be true? (Assume that the capital account is zero and net transfers are zero.)

A) Net exports are negative. B) Capital outflows are less than capital inflows. C) Domestic investment must be less than national saving. D) None of the above are true when net foreign investment is positive.

Some people have argued that government should provide only those goods that we would truly define as public goods. If so, which of the following should government produce?

a. National Defense b. day-care centers for children of working mothers c. mail delivery d. unemployment benefits e. subsidies for agricultural products