In national income accounting, the two uses of disposable income are
A. Saving and investment.
B. Personal income and personal taxes.
C. Consumption and investment.
D. Saving and consumption.
Answer: D
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In Macroland, currency held by the public is 2,000 econs, bank reserves are 300 econs, and the desired (and current) reserve/deposit ratio is 15 percent. If commercial banks borrow 100 econs in reserves from the Central Bank through discount window lending, then the money supply in Macroland will ________, assuming that the public does not wish to change the amount of currency it holds.
A. increase to 4,100 econs B. decrease to 1,900 econs C. increase to 3,133 econs D. increase to 4,667 econs
The concept of Nash Equilibrium:
A. has wide applicability. B. is limited in its applicability to economic behavior because firms do not follow their dominant strategies. C. is limited in its applicability to economic behavior because firms generally follow their dominant strategies. D. has been disproven by modern economists.
A substantial increase in the legal minimum wage will tend to
A) expand employment by increasing purchasing power and hence the demand for output. B) improve the position of the least skilled persons in the labor force. C) reduce employment by raising the cost of hiring some employees above their expected worth to potential employers. D) reduce the wages of highly skilled and highly paid employees.
The difference between gross public debt and net public debt is that
A) net public debt includes interagency borrowing while the gross domestic product debt does not. B) net public debt is expressed in real terms while gross public debt is expressed in nominal terms. C) gross public debt includes interagency borrowing while net public debt does not. D) gross public debt is held by individuals while net public debt is held by the government.