The economic system characterized by private ownership of resources and market is:

Refer to the above figure. Suppose that the economy initially is operating along AD1

If the government seeks to close the recessionary gap by raising government spending without any change in taxation, which moves the aggregate demand curve from AD1 to AD2, then to AD3. Which of the following scenarios is TRUE? A) Interest rates fall and investment rises. B) Both interest rates and investment fall. C) Both interest rates and investment rise. D) Interest rates rise and investment falls.

The total income of capital and labor must equal the value of total:

A. production. B. revenue. C. investment. D. profits.