Refer to the following graphs for a two-sector economy consisting of consumption and investment expenditures. Saving exceeds investment at a real income of _____ and therefore the real income level will _____ toward an equilibrium real income of _____.
a. Y4; fall; Y3
b. Y2; rise; Y3
c. Y1; rise; Y3
d. Y3; rise; Y4
a. Y4; fall; Y3
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What are the main influences on the quantity of real money that people and businesses plan to hold?
What will be an ideal response?
Which of the following was the main reason for increased counterparty risk in the shadow banking system prior to the financial crisis of 2007-2009?
A) increased leverage B) government insuring money market deposits C) many firms borrowing long term for short-term investments D) trading of derivatives on exchanges
Evaluate this sentence, "The best way to get rid of poverty is to increase government expenditures on welfare programs."
a. This sentence is inherently true. By providing the poor with more money they will no longer remain in poverty. b. This sentence is true. Everyone would be better off if we increased government transfer programs. c. This sentence is false. Increasing transfer benefits like welfare will lower the opportunity cost of making decisions that can lead to poverty d. This sentence is false. Increasing government expenditures will only be harmful to those in poverty.
Suppose a jar of orange marmalade that is ultimately sold to a customer at The Corner Store is produced by the following production process: Name of CompanyRevenuesCost of Purchased InputsCitrus Growers Inc.$0.750Florida Jam Company$2.00$0.75The Corner Store$2.50$2.00 If the oranges were grown and the jam produced in the year 2017, but the marmalade was sold at The Corner Store in the year 2018, what is the contribution of these transactions to GDP in the year 2017?
A. $2.75 B. $2.50 C. $2.00 D. $1.25