Saving Is $40 Billion and Planned Investment Is $28 Billion

question 194

Multiple Choice

Saving is $40 billion and planned investment is $28 billion at the $175 billion level of output in a private closed economy.At this level,

• A)consumption will be $147 billion.
• B)actual investment will be $28 billion.
• C)unplanned investment will be positive $12 billion.
• D)unplanned investment will be negative $12 billion.

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Definitions:

Equilibrium Wage

The wage rate at which the quantity of labor firms wish to hire equals the quantity of labor workers wish to supply in the labor market.

Marginal Product

The extra output that is produced by using one more unit of a variable input, holding other inputs constant.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a resource or input.

Supply of Labor

The total hours that workers are willing and able to work at a given wage rate, in a given time period.