In calculating total spending, after adding together Consumption, Investment, and Government Purchases, we must
a. add imports and subtract exports
b. add exports and subtract imports
c. compute net consumption and net investment by subtracting products produced abroad
d. compute net consumption and net investment by adding products produced abroad
e. compute net consumption and net investment by add products consumed abroad
B
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The tax multiplier is the
A) magnification effect of a change in taxes on aggregate supply. B) magnification effect of a change in taxes on the national debt. C) magnification effect of a change in taxes on the budget deficit. D) magnification effect of a change in taxes on government expenditures. E) magnification effect of a change in taxes on aggregate demand.
The local lemon market has the following supply and demand relationships:
QD = 100 - 5p - po + 2I QS = 4p where p is the price of lemons (per pound), Q is the quantity of lemons in pounds, I is the average consumer income, and po is the price per pound of oranges. Derive the equilibrium price and quantity of lemons as functions of the price of oranges and average consumer income. Use the calculus method of comparative statics to compute the effects of income and the price of oranges on the equilibrium price and quantity of lemons.
Macroeconomics emerged as a separate subject largely in response to:
A. Irving Fisher's development of the quantity theory of money. B. Adam Smith's The Wealth of Nations. C. John M. Keynes's explanation of business cycles. D. Alfred Marshall's distinction between the long run and short run.
The price of milk would be of particular interest to
A. a microeconomist. B. a macroeconomist. C. neither a microeconomist nor a macroeconomist. D. both a microeconomist and a macroeconomist.