Suppose that in a closed economy GDP is equal to 20,000, consumption equal to 15,000, government purchases equal 4,000 and taxes equal 3,000 . What are private saving, public saving, and national saving?
a. -2,000, 1,000, and 2,000, respectively.
b. 1,000, 2,000, and 3,000, respectively.
c. 2,000, -1,000, and 1,000, respectively.
d. 2,000, 1,000, and 2,000, respectively.
c
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Joe's Taco Hut can purchase a delivery truck for $20,000 and Joe estimates it will generate a net income (after taxes, maintenance and operating costs) of $2,000 per year. He has no other opportunities. He should:
A. purchase the truck if the real interest rate is greater than 10%. B. not purchase the truck if the real interest rate is greater than 2%. C. purchase the truck only if the real interest rate is less than 2%. D. purchase the truck if the real interest rate is less than 10%.
As the real interest rate rises, the quantity of loanable funds supplied ________ and the quantity of loanable funds demanded ________
A) does not change; does not change B) decreases; decreases C) increases; decreases D) increases; increases E) decreases; increases
Briefly describe why some economists prefer a value-added tax (VAT) to an income tax
What sequence of events results from an increase in aggregate demand?
A. The price level falls, inventories increase, firms respond by reducing output and employment. B. The price level rises, inventories increase, firms respond by increasing output and employment. C. The price level falls, inventories decline, firms respond by increasing output and employment. D. The price level rises, inventories decline, firms respond by increasing output and employment.