Initially, the economy is at point B on Figure 10-3 above. We conclude that before adjustment,
A) per person savings is at point D and the level of steady state investment is at point C.
B) per person savings is at point E and the level of steady state investment is at point E.
C) per person savings is at point G and the level of steady state investment is at point E.
D) per person savings is at point C and steady state investment is at point D.
D
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The price of holding money balances is equal to the
A) price of bonds that could have been purchased with those money balances. B) price of goods and services that could have been purchased with those money balances. C) the interest rate that could have been earned had those money balances been invested in an interest-bearing alternative (e.g., a bond). D) any of the above
Refer to the given diagram and assumptions. If migration is costless and unimpeded, the absolute wage bill will necessarily:
(1) The demand for labor in Alphania and Betania are as shown by D A and D B ,
respectively; (2) Alphania's native labor force is F and that of Betania is g; (3) wage L in Alphania is equal to wage m in Betania; and (4) full employment exists in both countries.
A. increase in Alphania if its labor demand curve is elastic.
B. increase in Betania if its labor demand curve is elastic.
C. decrease in Betania.
D. increase in Betania.