List and describe the sources of spending in the economy by focusing on the four major sectors of the economy
What will be an ideal response?
The four major sources of spending in the economy include consumption spending, which is spending by households on durable and non-durable goods and services; gross private domestic investment, which includes spending on plant and equipment (by businesses), residential construction (by households), and inventories (by businesses); government consumption expenditures and gross investment; and net exports, i.e., the difference between export spending (by foreigners on domestically produced goods and services) and spending on imports (domestic spending on foreign-made goods and services).
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The real output of the economy under conditions of full employment
A) is long-run aggregate demand. B) is long-run aggregate supply. C) happens only when there is no inflation. D) is determined by the real-balance effect.
In 2013, the reference base period for the CPI for the nation of Wobet, a typical consumer spent $30 on potatoes and $150 on steak. Which of the following is true?
A) The quantity of steak in the basket is larger than the quantity of potatoes. B) The quantity of potatoes in the basket is larger than the quantity of steak. C) The quantity of the two goods in the basket is the same. D) We cannot say exactly how many of each good are in the basket. E) None of the above answers is correct.
The Fed was committed to keeping interest rates low to assist Treasury financing of budget deficits
A) only during World War I. B) during the Great Depression. C) during World War I and World War II. D) throughout the entire existence of the Fed.
Which of the following best explains the R&E Tax Credit?
a. Private firms’ taxes are reduced based on their R&D activities. b. Private firms receive government grants for R&D investments. c. Universities that engage in R&D receive additional tax breaks. d. Citizens receive government grants for developing new technologies.