Last year a country had $700 billion of saving and $900 of investment. What was its net capital outflow? How is it possible for a country to have investment that exceeds saving?
Net capital outflow equals saving - domestic investment equals $700 billion -$900 billion = -$200 billion. A country can have investment that exceeds saving if it borrows from abroad, that is if on net foreigners purchase domestic assets.
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The table above gives data for the nation of Mosh. If real GDP is $6 trillion, then
A) firms increase production because inventories are less than their target levels. B) the economy has reached equilibrium and no change in production will occur. C) firms increase production because inventories exceed their target levels. D) firms decrease production because inventories exceed their target levels. E) We need more information to determine whether firms increase, decrease, or do not change their production.
The slope of a production possibilities frontier
A) is always varying. B) measures the opportunity cost of producing one more unit of a good. C) has no economic relevance or meaning. D) is always constant.