Exhibit 5-10 GDP data (billions of dollars)
Indirect business taxes$ 600
Depreciation950
Change in business inventories50
Compensation of employees5,400
Corporate profits700
Durable goods600
Exports100
Social Security taxes360
Transfer payments300
Fixed investment950
Government spending800
Imports150
Net interest500
Nondurable goods2,000
Personal taxes1,000
Rental income200
Services4,000
In Exhibit 5-10, and using the expenditures approach, compute net exports (X-M). Which of the following is correct?
A. $500 billion.
B. $150 billion.
C. $100 billion.
D. -$50 billion.
Answer: D
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According to Keynes, the most important determinant of an individual's real saving is
A) interest rates. B) the foreign exchange rate. C) the individual's real disposable income. D) the level of investment.
All else constant, an increase in the supply of
A) increases the equilibrium quantity and the equilibrium price of bonds. B) increases the equilibrium quantity and decreases the equilibrium price of bonds. C) decreases the equilibrium quantity and increases the equilibrium price of bonds. D) decreases the equilibrium quantity and the equilibrium price of bonds.
What policy tool of the Federal Reserve relies on bank borrowing to be effective?
A. Open-market operations B. Check collection C. The reserve ratio D. The discount rate
A statement of coercion by one firm is:
A. An empty threat if it is believed by the other firm B. A credible threat if it is not believed by the other firm C. Always a credible threat whether or not it is believed by the other firm D. A credible threat if it is believed by the other firm