When the Economy Is in Macro Equilibrium

question 38

Multiple Choice

When the economy is in macro equilibrium,

• A) the sum of savings plus investment must equal the sum of imports plus exports.
• B) the sum of savings plus imports plus taxes must equal the sum of investment plus government purchases plus exports.
• C) the sum of savings plus government purchases must equal exports minus imports.
• D) the government's budget must be in balance.

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Definitions:

Pure Rent

Income received by a landowner for the use of a natural resource, land, or location that is essentially in fixed supply.

Pure Rent

Income earned from owning a resource completely fixed in supply, with no additional production cost.

Fixed Supply

A situation where the quantity of a good available is constant and does not change with price.

Demand Determined

A characteristic of markets where the quantity of goods or services sold is primarily influenced by consumer demand.