Which of the Following Is CORRECT

question 185

Multiple Choice

Which of the following is CORRECT?

• A) As disposable income increases, the real interest rate increases.
• B) As disposable income decreases, saving decreases.
• C) As saving decreases, disposable income increases.
• D) As saving increases, investment by households decreases.

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Definitions:

Import Tariffs

Taxes imposed by a government on goods imported from other countries to protect domestic industries or to generate revenue.

Quotas

Quotas are limits set by a government on the amount of a particular commodity that can be imported or produced domestically in a certain period, used as a means to regulate trade and support local industries.

Comparative Advantage

The ability of an entity (could be a person, company, or country) to produce a good or service at a lower opportunity cost than another.

Domestic Prices

Relates to the cost of goods and services within a country's borders, which can be influenced by factors such as supply and demand, taxation, and government policies.