Which of the following restrictions implies that private saving and investment are equal for a closed economy?
a. Consumption and private saving are equal.
b. The economy's government is running neither a surplus nor a deficit.
c. Private saving and public saving are both zero.
d. No restriction is necessary; private saving and investment are equal for all closed economies.
b
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When a bank issues a checkable deposit and loans the funds out to a business, it has transformed
A) a financial asset for a saver into a liability for a borrower. B) a financial liability for a saver into a financial asset for a borrower. C) a short-term liability to a borrower into a long-term asset to a saver. D) one liability into another liability.
For a normal good, the
a. income effect is greater than 1.0 b. income effect is negative c. substitution effect is zero d. income effect and the substitution effect work in the same direction e. demand curve is horizontal