In a closed economy, real Gross Domestic Product (GDP) is at equilibrium occurs where
A. saving exceeds planned investment.
B. planned expenditures exceed national income.
C. the C + I + G line crosses the 45-degree line.
D. all of these.
Answer: C
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The supply of paintings by Van Gogh is most likely to be
a. of infinite elasticity because supply is limited b. of high elasticity because supply is limited c. elastic because the paintings are luxury goods d. inelastic because supply is limited e. unit elastic
Following adjustments to a new equilibrium in a market, the equilibrium quantity remains unchanged, but the market clearing price is now lower. Which of the following could definitely have caused this outcome?
A) Demand and supply both increased. B) Demand and supply both decreased. C) Demand increased, and supply decreased. D) Demand decreased, and supply increased.