Assuming full employment, if the private sector saves 8 percent of its income and the government raises taxes by $500 to finance public investments, total investment will increase by $460
Indicate whether the statement is true or false
TRUE
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The level of output at which the short-run aggregate supply curve and the aggregate demand curve intersect is the full-employment level of GDP
Indicate whether the statement is true or false
Which of the following categories accounts for roughly 70% of all federal spending?
a. Regional development, law enforcement and the judicial system, and administrative costs b. Transportation, housing, education, and income support for the poor c. International affairs, science and technology, and natural resources d. National defense, Social Security, health care, and interest payments
The current account includes which of the following?
a. all international transactions in currently produced goods and services b. net income from foreign assets c. net unilateral transfers d. all of the above are included in the calculation of the current account
The law of diminishing returns results in:
A. an eventually rising marginal product curve. B. a total product curve that eventually increases at a decreasing rate. C. an eventually falling marginal cost curve. D. a total product curve that rises indefinitely.