In a closed economy, if the goods market is in equilibrium, national saving is $2 trillion, national consumption is $7 trillion, and government purchases are $2.5 trillion, then GDP equals
A) $7 trillion.
B) $9.5 trillion.
C) $11.5 trillion.
D) Not enough information has been provided to determine the answer.
C
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Suppose a presidential candidate campaigns on the need to improve U.S. infrastructure, a term for capital goods like bridges, highways, and technology (much of it publicly owned). Which would lead to faster growth: government expenditure on capital goods or expenditure on consumption goods such as sports stadiums? Illustrate your answer, drawing appropriate production possibilities frontiers accompanied by an explanation.
What will be an ideal response?
The merger of two pizza restaurant chains would be an example of
A) a horizontal merger. B) a vertical merger. C) a conglomerate merger. D) an independent merger.
Transfer payments are:
a) excluded when calculating GDP because they only reflect inflation. b) excluded when calculating GDP because they do not reflect current production. c) included when calculating GDP because they are a category of investment spending. d) included when calculating GDP because they increase the spending of recipients.
For a given money demand curve, an increase in money supply _____
Fill in the blank(s) with the appropriate word(s).