A newspaper headline reads: "Fed Cuts Federal Funds Rate for Fifth Time This Year." This headline indicates that the Federal Reserve is most likely trying to:
a. Tighten monetary policy
b. Raise interest rates
c. Ease monetary policy
d. Reduce inflation in the economy
c. Ease monetary policy
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If a reduction in taxes on savings reduced the amount of private saving, then the
a. income effect equaled the substitution effect. b. income effect outweighed the substitution effect. c. the substitution effect outweighed the income effect. d. None of the above.
Table 5.3National Income Accounts (dollar figures are in billions)Expenditures for consumer goods and services$8,200Exports$1,700Government purchases of goods and services$2,500Social Security taxes$1,900Net investment$1,400Indirect business taxes$1,400Imports$1,900Gross investment$1,800Corporate income taxes$600Personal income taxes$1,500Corporate retained earnings$130Net foreign factor income$100Government transfer payments to households$1600Net interest payments to households$500On the basis of Table 5.3, the value of the income aggregate that is defined as "total income earned by current factors of production" (also known as national income) is
A. $11,900 billion. B. $12,000 billion. C. $12,300 billion. D. $10,700 billion.
Describe the differences (in sign and relative magnitude) between the government purchases multiplier and the tax multiplier
What will be an ideal response?
Refer to the below graphs. (Assume that the pre-migration labor force in Country A is 0d and that it is 0u in country B.) If business income is total output minus total labor cost, then business income in country A after the immigration occurs is equal to area:
A. haf
B. habg
C. hcg
D. hce0