Sam quits his job as an airline pilot and opens his own pilot training school. He was earning $40,000 as a pilot. He withdraws $10,000 from his savings where he was earning 6 percent interest and uses the money in his new business. He uses a building he owns as a hangar that he could have rented out for $5,000 per year. He rents a computer for $1,200, buys office supplies for $500, rents an
airplane for $6,000 . pays $1,300 for fuel and maintenance, and hires one worker for $30,000 . Sam's total revenue from pilot training classes this year equaled $90,400 . Sam's explicit costs this year equal
a. $84,400
b. $39,000
c. $55,000
d. $45,600
e. $40,000
B
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The traditional Keynesian approach concludes that an increase in government spending
A) generates a greater increase in investment spending. B) generates a greater increase in total spending because consumption spending increases as incomes increase. C) has no effect on total spending because consumers increase saving by an equal amount. D) generates an equal increase in total spending because government spending makes up part of total spending.
Why are real interest rates more important than nominal interest rates with regard to analyzing the supply and demand of loanable funds?
Which of the following is true of Western Europe, Japan, Canada, Mexico, and China taken together?
a. All these countries are classified as high-income countries by the World Bank. b. They are all members of the North American Free Trade Agreement [NAFTA]. c. All these countries are considered developing countries by the World Bank. d. They are collectively the largest trade partners of the U.S. e. They are the five largest exporters of agricultural produce in the world.
When the Fed buys a Treasury bill from the public, how does it usually pay for the T-bill?
a. by writing a check on a commercial bank account b. by printing new Federal Reserve notes c. by creating new reserves in bank accounts d. by prepaying taxes into the Treasury's account