In Watermala, the marginal propensity to consume is 0.6, base consumption is $1,000 . the tax rate is 30 percent of income, national income is $5,000 . investment spending is $800, government spending is $1,500, export earning is $1,000 . and import spending is $500 . Given this information, Watermala's aggregate expenditure equals _____
a. $5,900
b. $7,800
c. $3,900
d. $10,300
a
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A creditor nation means a nation
A) whose exports exceed its imports. B) whose current account is larger than its capital account. C) whose current lending to the rest of the world exceeds its borrowing from the rest of the world. D) who through its history has invested more in the rest of the world than other countries have invested in it.
By 1910 the top ten industries included printing, malt liquors, tobacco cars and railroad cars. The introduction of these new top ten industries indicated
(a) a shift in consumer preferences toward luxury items. (b) an increase in real incomes in the U.S., permitting people to purchase luxury items. (c) a smaller percentage of total consumption expenditures on essential food, clothing and shelter. (d) all of the above.
Refer to above figures. Prior to the shift of the curves, which panel and which curve involve the existence of negative externality?
A) Panel 1 and S1 B) Panel 1 and S2 C) Panel 2 and D1 D) Panel 2 and D2
Many economists believe that if fiscal policy turns contractionary to reduce the deficit,
A. monetary policy can turn expansionary to counteract the effects on aggregate demand. B. monetary policy must be contractionary to reinforce the good effects of contractionary fiscal policy. C. foreign investment in the United States must be encouraged. D. taxes on the earnings from stock market gains should be increased.