Use the Following to Answer Questions

question 387

Multiple Choice

Use the following to answer questions :
Scenario: A Small Economy
Suppose there is no trade and no government in a small economy. GDP is $25 trillion, and consumption spending is $18 trillion this year.
-(Scenario: A Small Economy) Look at the scenario A Small Economy. What is the level of private saving?

• A)$7 trillion
• B)$18 trillion
• C)$43 trillion
• D)-$7 trillion

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Definitions:

Fixed Manufacturing Cost

Expenses that do not change with the level of production, such as rent, salaries, and equipment depreciation in a manufacturing setting.

Production Volume

The amount of products a factory or plant has manufactured in a given time frame; it measures the output level of production activities.

Factory Utility Cost

The expense associated with the utilities consumed in the production process, such as electricity, gas, and water.

Mixed Cost

A cost composed of a fixed component and a variable component that changes with the level of activity or production.