The equation representing the investment schedule for the economy is:
Answer the question on the basis of the following data for a private
closed economy. The letters Y, C, S, and I are used to represent real GDP, consumption, saving, and investment respectively.
A. I = .3Y.
B. I = 80 - .3Y.
C. I = 30 + .1Y.
D. I = I 0 = 30.
C. I = 30 + .1Y.
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If a good has an external benefit, efficiency can be achieved by
A) leaving the market unregulated. B) monopolizing the market. C) offering a private subsidy on the good equal to the external benefit. D) imposing a tax on the good equal to the external benefit.
Describe how a lender can lose during inflation if the inflation is unanticipated and the loan is a fixed-interest-rate loan. How would a variable-interest-rate loan (one that adjusts over the contract period) eliminate these loses?
What will be an ideal response?