Carefully define the following terms and explain their importance in the study of macroeconomics:
a. Expenditure schedule
b. Saving schedule
c. Equilibrium GDP
d. Leakages schedule
e. Injections schedule
What will be an ideal response?
a. The expenditure schedule shows the relationship between national income (GDP) and total spending. The components of spending are consumption, investment, government spending, and net exports. This is the demand side of the economy.b. The saving schedule indicates the level of total saving for the economy at various levels of disposable income. It can be derived from the consumption schedule. Because disposable income is either consumed or saved, the saving schedule can be computed as S = DI ? C where S = saving schedule, DI = disposable income, and C = consumption schedule.c. Equilibrium GDP refers to a condition in which neither consumers nor business firms have any incentive to change their behavior. They are content with things as they are. The economy tends to move toward an equilibrium, or to remain at equilibrium, unless some underlying variable changes.d. The leakages schedule indicates the level of leakages from the flow of income and spending at various levels of disposable income. Leakages include saving, taxes, and imports.e. The injections schedule indicates the level of injections into the flow of income and spending at various levels of disposable income. Injections include investment spending, government spending, and exports. At equilibrium GDP, the level of leakages must equal the level of injections.
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Refer to Table 15-1. What is the marginal revenue from the sale of the 12th unit?
A) $75 B) $50 C) $20 D) -$5
When a tax is imposed and some of the lost surplus becomes tax revenues, the group that benefits is:
A. consumers. B. producers. C. recipients of government services. D. Only the government benefits from that lost surplus.
Which of the following about Social Security is true?
a. All of the current revenues flowing into the Social Security system are needed for benefit payments to current retirees. b. If the Social Security surplus was used to pay down the privately held federal debt, this would reduce future taxes and, thereby, make it easier to deal with the retirement of the baby boomers. c. During the 1980s and 1990s, most of the social security surplus was used to reduce the national debt. d. When the Social Security surplus is used to cover the current operating expenses of the federal government, it will make it easier for future taxpayers to provide promised Social Security benefits to baby boomers.
Compared to wages of professional athletes, the prices of automobiles in the United States have
A. fallen. B. risen. C. stayed the same. D. risen at the same rate as the CPI.