The Critical Issue of Macro Instability,when There Is No Government

question 30

Multiple Choice

The critical issue of macro instability,when there is no government intervention and no foreign trade,is whether

• A)spending injections will equal spending leakage at full employment.
• B)Savings and taxes will be equal.
• C)Investment and consumption will exceed disposable income.
• D)Consumption and savings lead to the ideal interest rate.

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Definitions:

Total Revenue

The total amount of money received by a company from sales of goods or services, before any expenses are subtracted.

Infant Industry

An industry in its early stages of development, which may be protected by the government from international competition temporarily until it becomes competitive.

Protective Tariffs

Import taxes imposed by a country on foreign goods to protect domestic industries from competition by making imported goods more expensive.

Comparative Advantage

The capacity of an entity to generate a product or service with a lesser opportunity cost compared to others.