In a closed economy:
A) consumption is equal to zero. B) investment is equal to zero.
C) government spending is equal to zero. D) net exports is equal to zero.
In a closed economy, without the government, the consumption expenditure equals $5,000 and the investment expenditure equals $2,000.
D
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Which of the following statements is true?
A) It is easier for a person to optimize when he has less information. B) Optimization implies choosing the best option from a set of alternatives. C) People always successfully optimize given the limited information they have. D) Optimization is an easy process, and all economic agents are perfect optimizers.
An external cost, such as the cost generated by pollution, is
A) a cost paid by consumers of the product. B) a cost paid by producers of the product. C) a cost paid by a third party or by society at large. D) not a true opportunity cost of production.