According to the circular flow model, ________.
A. net investment must equal gross investment
B. income must equal expenditures
C. exports must equal imports
D. saving must equal investment
Answer: B
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Firms in a monopolistically competitive industry maximize profits by
a. equating total revenue and total cost b. treating price as given and maximizing output c. minimizing costs d. producing the level of output at which MR = MC e. producing the level of output at which TR = TC
Economic growth can be measured by:
a) The CPI b) The CBI c) GDP d) MPC
If the marginal propensity to consume (MPC) is 0.75 and government purchases increase by $200 billion, then
A. equilibrium real Gross Domestic Product (GDP) will increase by $200 billion. B. equilibrium real Gross Domestic Product (GDP) will increase by $1600 billion. C. equilibrium real Gross Domestic Product (GDP) will increase by $800 billion. D. the effect on equilibrium real Gross Domestic Product (GDP) cannot be determined from the given information.
Given the following information on the tax paid for different levels of taxable income, fill in the average and the marginal tax rates for each income level. Also explain how to calculate the average tax rate and the marginal tax rate. Is this tax
progressive?
