A statement of assets and liabilities of any business entity is called
A. an income statement.
B. a balance sheet.
C. a statement of net worth.
D. a cash flow statement.
Answer: B
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Consider a tax cut which affects not only consumer disposable income, but also after-tax earnings from labor supplied to labor markets and from financial assets acquired through saving. In the long run we would expect this tax cut to
A) increase both the price level and the level of real GDP. B) decrease both the price level and increase real GDP. C) increase the price level. D) increase the level of real GDP.
Potential GDP in the United States
A) declines over time. B) changes over a given business cycle. C) does not change over time. D) grows as the economy grows.
Changes in the interest rate
a. change business spending, but not consumption spending b. shift the consumption function c. cause a movement along the consumption function d. change consumption spending but not business spending e. have no impact on autonomous consumption or business spending
Refer to the diagram in which T is tax revenues and G is government expenditures. All figures are in billions. The budget will entail a deficit:
A. at all levels of GDP.
B. at any level of GDP above $400.
C. at any level of GDP below $400.
D. only when GDP is stable.