In moving from a private closed to a mixed closed economy in the aggregate expenditures model, taxes:
A. must be added to gross investment.
B. must be added to saving.
C. must be added to consumption and gross investment.
D. have no impact upon the equilibrium GDP.
B. must be added to saving.
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A firm would be maximizing profit if MR > MC and TR > TC
Indicate whether the statement is true or false
The market demand curve represents the total quantity demanded at each price
a. True b. False Indicate whether the statement is true or false
Four friends decide to meet at a Chinese restaurant for dinner. They decide that each person will order an item off the menu, and they will share all dishes. They will split the cost of the final bill evenly among each of the people at the table. A Tragedy of the Commons problem is likely for each of the following reasons except
a. each person has an incentive to eat as fast as possible since their individual rate of consumption will not affect their individual cost. b. there is an externality associated with eating the food on the table. c. when one person eats, he may not take into account how his choice affects his friends. d. each dish would be both excludable and rival in consumption.
Explain the difference between marginal and average tax rates
What will be an ideal response?