Other Things Being Equal, a Country with a High National

question 37

Multiple Choice

Other things being equal, a country with a high national saving rate may have a long- run growth rate because more saving increases the .

• A)high; availability of funds, thus lowering the interest rate
• B)high; wealth of people and increases future consumption
• C)low; unemployment and decreases wages in the long run
• D)high; interest rate and encourages more investment
• E)low; consumption in the long run

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Definitions:

Price Takers

Price Takers are firms or individuals that accept the market price as given, with no influence over it, typically in markets with many sellers and buyers.

Economic Profits

The difference between a firm’s total revenue and its total costs, including both explicit and implicit costs, indicating the financial success beyond breaking even.

Profit-maximizing Firm

A business whose goal is to achieve the highest possible financial gain by adjusting production and pricing strategies based on market conditions.

Price-taker Market

A market situation where individual sellers or buyers have no influence over the price of a product, accepting the prevailing market price as given.