The Table Below Shows Aggregate Values for a Hypothetical Economy

question 114

Multiple Choice

The table below shows aggregate values for a hypothetical economy.Suppose this economy has real GDP equal to potential output. TABLE 25-3 Refer to Table 25-3.What is the level of private saving for this economy?

• A)$50
• B)$100
• C)$500
• D)$2000
• E)$3000

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Definitions:

Comparative Advantage

The ability of a country or firm to produce a particular good or service at a lower opportunity cost than its competitors, which enhances efficiency in international trade.

Production Possibilities

A curve or frontier representing the maximum combination of goods and services that can be produced efficiently with available resources and technology.

Specialize

To focus on a particular area of expertise or production, often to increase efficiency or performance in that area.

Comparative Advantage

The principle that holds a party can produce some goods at a lower relative cost than another, promoting beneficial trade.