Actual Investment Is $62 Billion at an Equilibrium Output Level

question 14

Multiple Choice

Actual investment is $62 billion at an equilibrium output level of $620 billion in a private closed economy.The average propensity to save at this level of output:

• A)is 0.10.
• B)is 10.
• C)is 0.62.
• D)cannot be determined on the basis of the information given.

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Definitions:

Cyclical Unemployment

The component of overall unemployment that results from economic recessions or expansions, directly correlating with the cyclical trends in the growth of the economy.

Structural Unemployment

Employment decline due to the transformation of the industrial landscape, primarily influenced by technological progress, rather than changes in demand or supply dynamics.

Structural

Pertaining to the intrinsic, essential framework or construction of something, often used in contexts like structural reforms in economics or structural engineering.

Shipbuilder

A person or company that specializes in the construction of ships.