Personal income is:
A. total income received by households after taxes.
B. the amount households have available for consumption, savings, and payment of personal taxes.
C. national income plus corporate profits and Social Security (FICA) plus transfer payments, and other income.
D. equal to gross domestic product.
Answer: B
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When Zane deposits $20,000 cash in his checkable deposit at the Citicorp and the Citicorp's desired reserves increase by $5,000, the desired reserve ratio is
A) 25 percent. B) 75 percent. C) 5 percent. D) 20 percent. E) $5,000.
Government expenditures are considered autonomous in the model meaning that changes are the result of:
A) changes in real income. B) changes in inflation. C) changes in unemployment. D) changes in policy decisions.
If the price of garbage removal rises, people will
A. demand a higher quantity of garbage removal. B. take less waste to recycling centers. C. repair broken items if the cost to do so is higher than throwing them away. D. take actions to avoid paying the higher price.
Which of the following is likely to occur if OPEC increases the amount of oil it supplies and domestic energy prices fall, ceteris paribus?
A. Aggregate supply will decrease or shift to the left. B. Aggregate supply will increase or shift to the right. C. Aggregate demand will increase or shift to the right. D. Aggregate demand will decrease or shift to the left.