The Inequality of Saving and Planned Investment

question 50

Multiple Choice

The inequality of saving and planned investment:

• A)is attributable to a low MPC.
• B)may be of considerable significance because of the subsequent changes in income, employment, and the price level.
• C)is of no consequence because a compensating inequality of tax collections and government spending will always occur.
• D)is of no consequence because saving and actual investment will always be equal.

---

Definitions:

Competitive Price-searcher Market

A market in which firms have some degree of market power and can determine their prices, often through differentiation and searching for competitive advantages.

Average Total Cost

The total cost of production divided by the number of units produced, reflecting the cost per unit.

Competitive Price-searcher Firm

A company that sets its own prices based on its products, costs, and the competitive environment, rather than taking the market price as given.

Average Total Cost

The total cost of production divided by the quantity produced, indicating the average cost per unit.