In an economy with no taxes, an income level of $400 billion, consumption of $300 billion, and government spending of $25 billion, saving is equal to
A) $25 billion.
B) $100 billion.
C) $275 billion.
D) $375 billion.
B
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Assume that an individual with an opportunity cost of time of $20 per hour has to choose between renting four apartments. The rents of the four apartments and the individual's monthly commuting time to work are shown in the following table
Calculate the direct cost, indirect cost, and total cost that the individual will incur if she rents any of these apartments. Also, determine the apartment that is optimum for the individual. Graph the total cost involved for the various choices. Apartment Monthly Commuting Time (hours) Rent ($) 1 60 2,800 2 90 2,200 3 120 1,500 4 150 1,400
There is a rise in labor productivity in the economy. As a result, in the short run Real GDP __________ and the price level __________
A) rises; falls B) falls; rises C) falls; falls D) rises; rises E) remains constant; remains constant
During the financial crisis of 2007–2009, the U.S. government determined that
A. AIG was too big to fail but Lehman Brothers was not. B. Lehman Brothers was too big to fail but AIG was not. C. both Lehman Brothers and AIG were too big to fail. D. neither Lehman Brothers nor AIG were too big to fail.
A decrease in consumption and an increase in labor supply would result from
A. a decrease in tax rates. B. an increase in transfer payments. C. an increase in government spending. D. a decrease in transfer payments.