If There Is No Government and No Foreign Sector in the Economy

question 159

Multiple Choice

If there is no government and no foreign sector in the economy

• A) personal income and disposable personal income are unequal.
• B) international trade is an important component of total spending.
• C) gross domestic product equals consumption plus investment.
• D) budget and trade deficits are important parts of the model of the economy.

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Definitions:

Short Run

A time period in economics during which at least one input, such as plant size, is fixed and cannot be changed.

Competitive Firm

A company that operates in a market with many sellers, where it has little to no control over the price of its product.

Perfectly Elastic

Perfectly Elastic describes a situation in which the quantity demanded or supplied responds infinitely or extremely sensitively to a change in price.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded by consumers at each price level.