Suppose output is $440 billion, government purchases are $40 billion, desired consumption is $320 billion, and net exports are $35 billion. Then desired investment equals
A. $45 billion.
B. $30 billion.
C. $20 billion.
D. $35 billion.
Answer: A
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The automatic budget deficits and budget surpluses that occur in the federal budget over the business cycle
A) destabilize the economy. B) stabilize the economy. C) decrease potential GDP. D) increase potential GDP.
Macroeconomists are able to study the entire economy by
a. ignoring much of the data available in order to reduce the number of markets that need to be studied b. studying only a few markets at a time c. simply adding up all the prices and quantities in individual markets d. aggregation which reduces the number of markets that need to be studied e. dividing total output by the number of markets
Between 1980 and 1995 government debt as a percentage of GDP
a. increased from about 25% to 50%. b. decreased from about 50% to 25%. c. decreased from about 25% to almost zero. d. increased from about 10% to 20%.
A benefit of deductibles and health savings accounts is that they
A. reduce the moral hazard problem associated with third-party payers. B. reduce the incomes of physicians. C. increase the quality of health care. D. reduce the use of expensive techniques for hopeless cases.