Suppose that in a closed economy GDP is equal to 15,000, government purchases are equal to 3,000, consumption equals 10,500, and taxes equal 3,500 . What are private saving and public saving?
a. 1,500 and -500, respectively
b. 1,500 and 500, respectively
c. 1,000 and -500, respectively
d. 1,000 and 500, respectively
d
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Suppose Island Bikes, a profit-maximizing firm, is the only bike rental company in a small resort town. The marginal cost to Island Bikes of renting out a bike is $3, and Island Bikes has no fixed costs. Each day Island Bikes has six potential customers, whose reservations prices are listed below.CustomerReservation Price($/Rental)A22B16C12D8E6F4 Suppose Island Bikes knows that customers whose reservation prices are at least $10 always rent bikes before noon, while those whose reservation prices are below $10 never do so. If Island bikes charges a different price in the morning and in the afternoon, then what will be the total economic surplus?
A. $49 B. $3 C. $9 D. $41
Which of the following is a financial intermediary?
A) an insurance company B) the Internal Revenue Service C) the Red Cross D) a share of corporate stock
Suppose that during a period of inflation, the Fed reduced its holdings of U.S. securities from $600 billion to $580 billion. This indicates that the Fed was
a. seeking to reduce the money supply to decrease inflation. b. trying to force Congress to decrease taxes. c. expanding the money supply and stimulating employment. d. expanding the money supply, even though the existing inflation suggested a restrictive policy would be more appropriate.
Assume the market for candles is competitive. A new invention leads to labor-augmenting technological progress in the production of candles. This development
a. decreases the demand for workers who make candles and decreases their equilibrium wage. b. increases the demand for workers who make candles and increases their equilibrium wage. c. increases the supply of workers who make candles and decreases their equilibrium wage. d. increases the supply of workers who make candles and increases their equilibrium wage.