Suppose That the Economy Is in Equilibrium with the Government

question 129

Multiple Choice

Suppose that the economy is in equilibrium with the government budget in surplus and with exports less than imports.According to the circular flow model,

• A)saving must exceed investment
• B)saving must be less than investment
• C)saving must equal investment
• D)saving could be greater than or equal to investment
• E)it is impossible to determine anything about saving and investment using the given information

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Definitions:

Individual Differences

Variations among individuals in their physical, psychological, and behavioral characteristics.

Allocating Rewards

The process of distributing benefits, compensation, or recognition to individuals or groups based on their performance or contribution.

Long-run Supply Curve

A graphical representation that shows the relationship between the market price of a product and the quantity supplied by all firms in the long run when all inputs can be varied.

Competitive Market

A market structure characterized by many buyers and sellers, where no single participant has the power to significantly influence prices for homogeneous products.