Suppose that personal income is $250 billion. Furthermore, assume that retained corporate earnings are $2 billion, social security taxes are $15 billion, social security benefit checks equal $16 billion, the capital consumption allowance is $32 billion, and corporate taxes amount to $40 billion. Gross national product of this nation will be:
a. $177 billion.
b. $259 billion.
c. $291 billion.
d. $343 billion.
e. $323 billion.
e
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Suppose a market is currently served by an incumbent firm. If a potential entrant can enter prior to the incumbent firm announcing its output (or price), the entrant will enter the market and force the incumbent to compete.
Answer the following statement true (T) or false (F)
In the table above, Y is measured along the y-axis and X along the x-axis. The slope between points e and f is
A) -25. B) 4. C) 0.25. D) -0.25.
If a corporation begins to suffer large losses, then the default risk on the corporate bond will
A) increase and the bond's return will become more uncertain, meaning the expected return on the corporate bond will fall. B) increase and the bond's return will become less uncertain, meaning the expected return on the corporate bond will fall. C) decrease and the bond's return will become less uncertain, meaning the expected return on the corporate bond will fall. D) decrease and the bond's return will become less uncertain, meaning the expected return on the corporate bond will rise.
Velocity is commonly calculated by which of the following formulas?
a. (Value of money stock)/(Value of nominal GDP) b. (Value of transactions)/(money stock) c. (Value of financial transactions)/(GDP) d. (Value of output)/(Value of input)