Which one of the following is TRUE in an open economy with a government sector?
A) The equilibrium level of real GDP occurs when total planned real expenditures equal real GDP.
B) The equilibrium level of real GDP occurs when planned real investment spending is zero.
C) The equilibrium level of real GDP occurs when planned real saving equals government spending.
D) The equilibrium level of real GDP occurs when real net export spending equals zero.
A
You might also like to view...
In the above figure, suppose the government subsidizes the production of milk so that milk production increases to 8 million gallons per day
What is the size of the deadweight loss? (Hint: It is equal to the triangular area of negative consumer and producer surplus that results when output exceeds the efficient level.) A) $12.5 million B) $6.25 million C) $4.50 million D) $2.25 million
Jim is planning on attending a football game that costs $40 . He will have to take the day off from the work losing 8 hours of work. His hourly wage is $10 . He estimates it will cost him around $20 for gas and parking at the game. Jim's implicit (opportunity) cost of attending the game equals
a. $80 b. $40 c. $20 d. $140
For the short-run Phillips curve to remain relatively stable, then changes in real GDP must occur primarily as a result of shifts in: a. changes in aggregate demand
b. changes in real wages caused by changes in the supply of labor. c. changes in inflationary expectations. d. changes in aggregate supply.
If total revenue is increased, which of the following must have been true?
a. MR = 0 b. MR > 0 c. MR = AR d. MR < 0 e. MR < MC