In a Simple Economy (No Government Sector), the Equilibrium Level

question 50

Multiple Choice

In a simple economy (no government sector) , the equilibrium level of GDP will be less than the full employment level of income if, at the full employment level of income, the

• A)saving that consumers want to do is less than investing that businesses want to do.
• B)saving that consumers want to do is greater than investing that businesses want to do.
• C)saving that consumers want to do is less than spending that consumers want to do.
• D)inventories are being depleted.

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Definitions:

Quantity Imported

The total number of goods or services brought into a country from abroad for sale.

Import Quotas

Restrictions set by the government on the amount or monetary value of products allowed to be imported into a nation.

Tariffs

Taxes imposed by a government on imported goods, often used to protect domestic industries and to generate revenue.

Quantity of Imports

The total volume or value of goods and services brought into one country from another over a specified time period.