According to the "paradox of thrift," an increase in the
A. average propensity to save results in an increase in national output.
B. average propensity to save results in a decrease in unemployment.
C. saving function (upward shift) can result in a decrease in both national output and total saving.
D. consumption function (upward shift) results in a decrease in national income.
C. saving function (upward shift) can result in a decrease in both national output and total saving.
You might also like to view...
Alpha can produce either 18 tons of oranges or 9 tons of apples in a year, while Omega can produce either 16 tons of oranges or 4 tons of apples. Which of the following exchange rates between apples and oranges would allow both Alpha and Omega to gain by specialization and exchange?
a. 1 ton of oranges for 1/3 of a ton of oranges b. 1 ton of apples for 3 1/3 tons of oranges c. 1 ton of apples for 2 tons of oranges d. 1 ton of oranges for 0.4 tons of apples
Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and real GDP in the context of the Three-Sector-Model?
a. The real risk-free interest rate rises and real GDP rises. b. The real risk-free interest rate falls, and real GDP rises. c. The real risk-free interest rate rises, and real GDP falls. d. The real risk-free interest rate and real GDP remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.