According to the classical economists,
A. the interest rate will ensure that the amount households plan to save will equal the amount businesses desire to invest.
B. the amount households plan to save is determined primarily by their wage.
C. increasing government spending is the most reliable method of restoring full employment.
D. unemployment is caused by too little spending.
Ans: A. the interest rate will ensure that the amount households plan to save will equal the amount businesses desire to invest.
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When a nation starts importing a good or service, the domestic production of the good or service
A) decreases. B) stays the same. C) increases. D) might change, but more information about what the country exports is needed to determine if production increases, decreases, or does not change. E) might change, but more information about what else the country imports is needed to determine if production increases, decreases, or does not change.
Assume the price of beer is $4, the price of pizza is $10 and the consumer's income is $250. Which consumption bundle will NOT be the consumer's choice?
A) A (5 Beers, 5 Pizzas) B) B (0 Beers, 25 Pizzas) C) C (25 Beers, 15 Pizzas) D) None of the above bundles will be chosen.