If personal income exceeds national income in a particular year, we can conclude that:
a) transfer payments exceeded the sum of Social Security contributions, corporate income taxes, and taxes on production and imports.
b) the sum of Social Security contributions, corporate income taxes, and undistributed corporate profits exceeded transfer payments.
c) consumption of fixed capital and taxes on production and imports exceeded personal taxes.
d) transfer payments exceeded the sum of Social Security contributions, corporate income taxes, and undistributed corporate profits.
d) transfer payments exceeded the sum of Social Security contributions, corporate income taxes, and undistributed corporate profits.
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A perfectly competitive firm maximizes profits? (or minimize? losses) when it produces the quantity where marginal revenue equals marginal cost and the price? is:
A. greater than average fixed cost. B. greater than average variable cost. C. greater than average total cost. D. greater than marginal cost
The portion of the short-run aggregate supply that reflects the economy's resources are not fully employed is the:
A) vertical portion. B) horizontal portion. C) upward sloping portion. D) none of the above.
A _________ exchange rate policy allows monetary policy to focus on inflation and unemployment, but also raises a risk that exchange rates may sometimes make large and abrupt movements.
a. flexible b. pegged c. fixed d. fragmented
What are transfer payments, and how do they make their way into the GDP calculation?
What will be an ideal response?