Answer to Question #201010 in Macroeconomics for BISMARK KWAME

Question

1 Choose the wrong statement regarding national savings.

Select one from the following options.

i. The amount of national savings depends directly on the real interest rate.

ii. National savings represent income after deducting private consumption and government expenditures.

iii. National savings are the sum of private and public savings.

iv. All statements are correct.

2 "People confuse a change in the overall price level with a change in their relative prices." That is the main principle. Select one from the following options.

i. the model of sticky wages.

ii. classical aggregate supply curves.

iii. Lucas model of incomplete price information.

iv. Friedman's model of workers' misperception.

Answer 1

1)iv. All statements are correct.

2)iii. Lucas model of incomplete price information.