Suppose that personal income is $250 billion. Furthermore, assume that retained corporate earnings are $2 billion, social security taxes are $15 billion, social security benefit checks equal $16 billion, the capital consumption allowance is $32 billion, and corporate taxes amount to $40 billion. The national income of this nation will be:
a. $236 billion.
b. $249 billion.
c. $251 billion.
d. $279 billion.
e. $290 billion.
c
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Suppose Gerald works for Lola as a production assistant. Gerald and Lola fall in love, get married and have children. Gerald stops working for Lola in order to care for the children. What will be the effect of this scenario on GDP?
A) GDP will increase. B) GDP will decrease. C) GDP will not change. D) GDP may increase or decrease depending on the rate of inflation.
There is a proverb "anything worth doing is worth doing well." Do you think an economist would agree with this proverb?
What will be an ideal response?
The GATT is
A) an international treaty. B) an international U.N. agency. C) an international IMF agency. D) a U.S. government agency. E) a collection of tariffs.
An increase in taxes will cause the consumption schedule to
a. shift upward. b. shift downward. c. remain fixed as the economy moves upward along the schedule. d. remain fixed as the economy moves downward along the schedule.