Answer the question on the basis of the following data. All figures are in billions of dollars. Personal Taxes 40 Social Security Contributions 15 Taxes on Production and Imports 20 Corporate Income Taxes 40 Transfer Payments 22 US Exports 24 Undistributed Corporate Profits 35 Government Purchases 90 Gross Private Domestic Investment 75 US Imports 22 Personal Consumption Expenditures 250 Consumption of Fixed Capital 25 Net Foreign Factors Income 10 Statistical Discrepancy 0 Refer to the above data. DI is:
a) $284.
b) $329.
c) $274.
d) $402.
c) $274.
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Full-employment equilibrium occurs when
A) real GDP exceeds potential GDP. B) real GDP equals potential GDP. C) potential GDP exceeds real GDP. D) None of the above answers are correct.
Dalton, Georgia, a town with a population less than 35,000, has developed into a leading producer of carpets, despite its small size
Some government officials argue that the success achieved by firms in Dalton in developing a comparative advantage in carpet making because of external economies can be used to justify trade barriers as a means to protect an "infant industry." After an infant industry gains experience it can compete in international markets and the trade barriers can be removed. What objections do economists make to this argument in favor of trade barriers?
The unemployment compensation program:
a. makes recessions more severe. b. makes recession less severe. c. makes recessions more severe and inflationary episodes less severe. d. makes recessions less severe and inflationary episodes more severe. e. has no effect on the severity of recessions and inflationary episodes.
Government can step in to make economic decisions that address problems markets create, but government action is also imperfect and may not reflect majority views. What situation can arise in which it would be very difficult to identify which choice the majority of voters approves?
a. Budget trading b. Vote cycling c. Logrolling d. Pork-barrel spending