When estimating GDP using the income approach, aggregate income is adjusted by
A. adding net income earned abroad.
B. subtracting depreciation.
C. subtracting indirect business taxes.
D. subtracting net income earned abroad.
Answer: D
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M3 is an example of a Federal Reserve
A) directive. B) tool. C) intermediate target. D) operating target.
The Board of Governors of the Federal Reserve is part of a larger policy-making group called the
A) Senate Banking Committee. B) Federal Deposit Insurance Corporation. C) American Banking Association. D) Federal Open Market Committee.
Automatic stabilizers
A. eliminate the business cycle. B. include increasing and decreasing tax bracket rates. C. guarantee that the federal budget will be balanced over the course of the business cycle. D. require no legislative action by Congress to be made effective.
The graph above shows the PPC for a country that can produce oil or televisions. The straight line is the trade line and CPC if production is at Point A. Which of the following is a true statement?
A) This country should produce relatively more butter and relatively less coffee. B) This country should produce relatively less butter and relatively more coffee. C) This country should produce more of both goods. D) This country is producing the optimal mix of butter and coffee to maximize its income.