The GDP of Country A is equal to $124.5 billion, and the consumption expenditure in the economy is $85.9 billion. The government of Country A charges a flat tax of 20 percent. The government also spends $4.5 billion per year in the form of transfer payments. The disposable income of the country is equal to:
a. $99.6 billion
b. $104.1 billion.
c. $124.5 billion.
d. $129.0 billion.
a
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Demand is perfectly inelastic when
A) shifts in the supply curve results in no change in price. B) the good in question has perfect substitutes. C) shifts of the supply curve result in no change in quantity demanded. D) shifts of the supply curve result in no change in the total revenue from the quantity sold.
The new Keynesian economists argue that prices are relatively rigid because of
A) menu costs. B) overlapping staggered contracts. C) efficiency wages. D) All of the above.
The balance of payments improves
A) when there is an exchange rate appreciation. B) when there is an exchange rate depreciation. C) when the interest rate rises. D) never.
A new law requiring plumbers to pass strict certification tests that reduce the number of plumbers would
a. increase the wage rate of plumbers. b. decrease the wage rate of plumbers. c. increase the employment of plumbers. d. cause no change in the labor market for plumbers.