According to classical economists, if the amount of funds households save is greater than the amount of funds firms invest, then
A) the interest rate will fall, ultimately moving to a level where the amount of funds households plan to save equals the amount of funds firms plan to invest.
B) the interest rate will rise, ultimately moving to a level where the amount of funds households plan to save equals the amount of funds firms plan to invest.
C) the interest rate will remain constant and people will simply buy more goods.
D) more money will he used for leisure purposes, since households save in order to consume leisure at some later time.
E) none of the above
A
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Suppose that Germany, France, Estonia, and India all have the same production possibilities, illustrated in the figure above. Based on the production points in the figure, Germany is most likely to expand its PPF to
A) PPF3 or PPF2. B) PPF3. C) PPF1. D) PPF1. or PPF2. E) PPF2.
Net exports of goods and services are defined as the
A) value of the goods we sell to foreigners. B) income we receive from selling goods to foreigners. C) value of exports minus the value of imports. D) value of exports minus the income we receive from foreigners. E) value of exports plus the income we receive from foreigners.