If the Rate of Interest Did Not Equate Saving and Investment

question 137

Multiple Choice

If the rate of interest did not equate saving and investment and total output was greater than total spending,the classical economist argued,competition would tend to force

• A)product and resource prices down.
• B)product prices up and resource prices down.
• C)product prices up and resource prices up.
• D)product prices down and resource prices up.

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Definitions:

Domestic Price

The price of goods or services within a country's borders, influenced by domestic demand and supply, excluding international factors.

Import Demand Curve

The import demand curve represents the relationship between the quantity of a good that a country imports and the price of that good.

Specialization

The practice of focusing effort and resources on a particular task or area of production to increase efficiency and output.

Increasing Opportunity Costs

The principle that the more a society tries to produce of a specific good, the higher the opportunity cost of further increasing its production.