If an Economy Is Closed and Wishes to Increase Its

question 248

Multiple Choice

If an economy is closed and wishes to increase its investment spending:

• A)its only source of funding is domestic saving.
• B)its sources of funding are domestic and foreign saving.
• C)the government will have to increase its spending to provide for this.
• D)the government will increase taxes to provide for this.

---

Definitions:

Economies of Scale

The cost advantages that enterprises obtain due to size, output, or scale of operation, with cost per unit of output generally decreasing with increasing scale.

Persistent

Continuously existing or enduring over a prolonged period.

Price Discrimination

A strategy in pricing where the same provider sells identical or nearly identical products or services for various prices across different markets or to distinct customer groups.

Production Functions

a mathematical relationship expressing the output that can be produced by a firm or economy from different combinations of factor inputs.