With the additional leakages of imports and taxes in additional to savings in a public, open economy, how is the economy still able to reach equilibrium?
What will be an ideal response?
The additional leakages are balanced by additional injections. The injections include exports and government purchases, in additional to investment. All of these activities increase the total level of expenditures to counteract the additional drain from imports, taxes and savings.
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The aggregate supply curve of an economy shows the relationship between the: a. price level and the total number of goods that consumers buy during a given period of time
b. goods that are not purchased during a given period and the wealth created during the given period of time. c. amount of investment spending and the market interest rate of an economy. d. price level and the quantity of all goods sellers are willing and able to provide during a given period of time.
In the graph of supply and demand in the market for labor:
A. individuals make up the demand curve. B. the equilibrium price of labor is generally denoted as L*. C. firms provide the demand. D. equilibrium is rarely achieved.