Carefully define the two categories of saving in the economy
What will be an ideal response?
There are two categories of saving in the economy: private saving by households and public saving by the government. Private saving is what is left of income after consumption expenditures and income taxes. Public saving is the amount of tax revenue that the government collects minus government expenditures and transfer payments.
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Suppose that real interest rates in the U.S. rise relative to real interest rates in other countries. This increase would make foreigners
a. more willing to purchase U.S. bonds, so U.S. net capital outflow would fall. b. more willing to purchase U.S. bonds, so U.S. net capital outflow would rise. c. less willing to purchase U.S. bonds, so U.S. net capital outflow would fall. d. less willing to purchase U.S. bonds, so U.S. net capital outflow would rise.
Figure 9-15 depicts the cost curves for a perfectly competitive firm. This firm’s short run supply curve is the section of the MC curve between points
a. A and D.
b. B and D.
c. C and D.
d. B and C.