Table 5.3National Income Accounts (dollar figures are in billions)Expenditures for consumer goods and services$8,200Exports$1,700Government purchases of goods and services$2,500Social Security taxes$1,900Net investment$1,400Indirect business taxes$1,400Imports$1,900Gross investment$1,800Corporate income taxes$600Personal income taxes$1,500Corporate retained earnings$130Net foreign factor income$100Government transfer payments to households$1600Net interest payments to households$500On the basis of Table 5.3, the value of the income aggregate that is defined as "income received by households before payment of personal taxes" (also known as personal income) is
A. $5,870 billion.
B. $10,070 billion.
C. $10,600 billion.
D. $9,570 billion.
Answer: B
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"After every fall election, the weather starts to turn cold, therefore elections cause cold weather." This statement
a. confuses positive and normative analysis. b. commits the fallacy of composition. c. fails to recognize that association is not causation. d. confuses macroeconomics with microeconomics.
Which of the following statements is true?
A. White test can be used to efficiently determine the presence of serial correlation in panel data. B. The t statistic is not an efficient test to determine serial correlation in panel data. C. Instrumental variables for both endogenous and exogenous variables are required for estimating simultaneous equation models concerned with panel data. D. 2SLS should be applied to simultaneous equation models with panel data only after removing the unobserved effects from the equations of interest.
Tracy and Amy are playing a game in which Tracy has the first move at X in the decision tree shown below. Once Tracy has chosen either the top or bottom branch at X, Amy, who can see what Tracy has chosen, must choose the top or bottom branch at Y or Z. Both players know the payoffs at the end of each branch.
If before Tracy chose, Amy could make a credible commitment to choose either the top or bottom branch when her turn came, then Amy would commit to the ________ branch and Tracy would choose the ________ branch.
A. bottom; top B. top; bottom C. top; top D. bottom; bottom
Which would decrease investment demand?
a. A decrease in the stock of capital goods on hand b. A decrease in business taxes c. An increase in the rate of technological change d. An increase in the cost of acquiring capital goods