The following are national income account data for a hypothetical economy in billions of dollars: government purchases ($1,050), personal consumption expenditures ($4,800), imports ($370), exports ($240), and gross private domestic investment ($1,130). Personal consumption expenditures are approximately what percentage of this economy?
A. 60 percent
B. 75 percent
C. 70 percent
D. 65 percent
Answer: C
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Marginal utility can be
A) positive. B) negative. C) zero. D) positive, negative, or zero.
If a government limits interest rates to a level below equilibrium, how do savers and investors respond? How is the discrepancy resolved?
What will be an ideal response?
If Ep is 3500 and Y is 3000, then companies will
A) reduce orders and production by 500. B) increase orders and production by 500. C) wait for final sales to increase but continue to produce at existing level in the future. D) wait for final sales to decrease but reduce the level of production in the future.
The fallacy of composition is the incorrect view that
a. decisions are always made at the margin. b. incentives matter only to those who behave selfishly. c. if something is true for an individual, then it must also be true for the group. d. the value of a good can be objectively measured by its cost of production.