6. Assume that Potential Real GDP equals $10,000. National Income is therefore $10,000. Of this, consumers will pay $2,000 in taxes, save $1,000, and spend $7,000 on consumer goods. Business Investment spending is $2000. In order to avoid recessions and inflation (to have equilibrium), the government should have a: a. balanced budget b. budget deficit of $1000 c. budget surplus of $1000 d. budget deficit of $2000 C C A A C

6. Assume that Potential Real GDP equals $10,000. National Income is
therefore $10,000. Of this, consumers will pay $2,000 in taxes, save $1,000,
and spend $7,000 on consumer goods. Business Investment spending is
$2000. In order to avoid recessions and inflation (to have equilibrium), the
government should have a:
a. balanced budget
b. budget deficit of $1000
c. budget surplus of $1000
d. budget deficit of $2000
C C A A C
by

1 Answer

Answer :

c. budget surplus of $1000
by

Related questions

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Last Answer : d. Inflation decreases savings in financial form

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Last Answer : a. $5,000

What is the total cost in dollars for adding 1.0 million units of capacity to a production line with an automation level of 1.0 and floor space costs per unit of $6? Assume automation costs per unit of $4. a. $26 million b. $10 million c. $2.6 million d. $1 million e. none of the above

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Last Answer : b. $10 million

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Last Answer : c. a government budget deficit raises interest rates and causes investment spending to fall

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Last Answer : c. a government budget deficit raises interest rates and causes investment spending to fall

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Last Answer : (c) $900

5. Assume that there are two goods, A and B. In 1996, Americans produced 10 units of A at a price of $10 and 20 units of B at a price of $20. In 2002, Americans produced 20 units of A at a price of $20 and 30 units of B at a price of $30. The Nominal GDP for 2002 is: a. $100 b. $400 c. $500 d. $900 e. $1300

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Last Answer : e. $1300

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Consumer's sovereignty means: (1) consumers are free to spend their income as they like. (2) consumers have the power to manage the economy. (3) consumer's expenditures influence the allocation of resources. (4) consumer goods are free from government control,

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Last Answer : A single tax that replaces State taxes like, surcharge, turnover tax, etc. 

1. Assume that there are only two goods: A and B In the base year, Quantity Price A 10 $1 B 10 $4 In the current year, Quantity Price A 20 $ 5 B 25 $20 The Consumer Price Index (CPI) for the current year is: a. 50 b. 100 c. 200 d. 500 e. 60

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3 men go into a motel. The man behind the desk said the room is $30, so each man paid $10 and went to the room. A while later the man behind thedesk realized the room wasonly $25, so he sent the bellboy to the 3 guys' room with $5. on the way the bellboy couldn't figure out how to split$5 evenly between 3 men, so he gave each man a $1 and kept the other $2 for himself. This meant that the 3 men each paid $9 for the room, whichis a total of $27, add the $2 that the bellboy kept = $29. where is the other dollar? -Riddles

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At the beginning of the year, Midtown Athletic had an inventory of $400,000. During the year, the company purchased goods costing $1,600,000. If Midtown Athletic reported ending inventory of $600,000 and sales of $2,000,000, the company’s cost of goods sold and gross profit rate must be a. $1,000,000 and 50%. b. $1,400,000 and 30%. c. $1,000,000 and 30%.

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Last Answer : b. $1,400,000 and 30%.

The difference between the price the consumer is prepared to pay for a commodity and the price which he actually pays is called (1) Consumer's Surplus (2) Producer's Surplus (3) Landlord's Surplus (4) Worker's Surplus

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The difference between the price the consumer is prepared to pay for a commodity and the price which he actually pays is called (1) Consumer’s Surplus (2) Producer’s Surplus (3) Landlord’s Surplus (4) Worker’s Surplus

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Last Answer : Consumer’s Surplus

5. Disposable Income is equal to: a. National Income c. National Income Minus Taxes b. Real GDP c. National Income Minus Taxes d. National Income Minus Taxes Plus Transfers

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Which of the following is not a component of GDP? (a) Government spending (b) Investment © Interest (d) Net exports

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When my income was $100,000, I paid $10,000 in taxes. When my income became $200,000, I paid $40,000 in taxes. My marginal tax rate is: a. 10% b. 20% c. 30% d. 40%

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When my income was $100,000, I paid $10,000 in taxes. When my income became $200,000, I paid $40,000 in taxes. My marginal tax rate is: a. 10% b. 20% c. 30% d. 40%

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In general, deficit financing can create inflation, but it can be checked if. A) Government expenditure increases the aggregate supply in the aggregate demand ratio B) All the investment is indicated as payment on national debt only C) Only aggregate demand is increased D) All of the above

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8. If the monetary base is increased by $1,000 and the reserve requirement is 10% (1/10), by how much will the money supply be increased? a. $100 b. $1,000 c. $5,000 d. $10,000

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Last Answer : d. $10,000

6. Using the numbers in question 5, the Real GDP for 2002 is: a. $400 b. $500 c. $800 d. $900 e. $1,300

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State which of the following is correct? The Consumer Price Index reflects - (1) the standard of living (2) the extent of inflation in the prices of consumer goods (3) the increasing per capita income (4) the growth of the economy

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Last Answer : (2) the extent of inflation in the prices of consumer goods Explanation: A consumer price index (CPI) measures changes in the price level of consumer goods and services purchased by households ... , pensions, for regulating prices and for deflating monetary magnitudes to show changes in real values.

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David is throwing Robert a surprise birthday party but he has to stay within his budget. He spent half of his money plus $2.00 on the cake. Half of what he had left plus $2.00 was spent on balloons and streamers. Then he spent half of what he had left plus $1.00 on candy. Now he is out of money, how much did he start with? -Riddles

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Last Answer : This one is best solved working backwards, the last part David spent half of what was left plus $1.00 on candy and then was out of money. That means he must have spent $2.00 on Candy as $1.00 was ... logic backwards: $2.00 on candy $6.00 on Balloons and Streamers $12.00 on the cake Total of $20.00.

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Last Answer : (4) necessities Explanation: Consumer surplus is the difference between the price consumers would be prepared to pay and the actual market price.

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The records of exports and imports in goods and services and transfer payments is known as a) Current account b) Budget surplus c) Economic leakage d) degree of openness

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On October 4, 2008, Terry Corporation had credit sales transactions of $2,800 from merchandise having cost $1,900. The entries to record the day's credit transactions include a a. debit of $2,800 to Merchandise Inventory. b. credit of $2,800 to Sales. c. debit of $1,900 to Merchandise Inventory. d. credit of $1,900 to Cost of Goods Sold.

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If you had a windfall of $1,000 and you had to spend, not save it, what would you buy?

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Last Answer : A star tracker, for astrophotography.

GDP at market prices is the sum of Consumption, Investment, Government Spending and Net Exports. „Net‟ exports is (a) Gross exports minus depreciation ; (b) Exports minus imports ; (c) Gross exports earnings minus capital inflow ; (d) Export minus imports of merchandize

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Last Answer : (b) Exports minus imports ;

Which of the following is not required while computing Gross National Product (GNP)? (1) Net foreign investment (2) Private investment (3) Per capita income of citizens (4) Purchase of goods by government

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Which of the following is not required while computing Gross National Product (GNP) ? (1) Net foreign investment (2) Private investment (3) Per capita income of citizens (4) Purchase of goods by government

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The basis of determining dearness allowance to employees in India is - (1) National Income (2) Consumer Price Index (3) Standard of Living (4) Inflation Rate

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The basis of determining dearness allowance to employees in India is _______ (1) National Income (2) Consumer Price Index (3) Standard of Living (4) Inflation Rate

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GDP at factor cost exceeds GDP at market price (a) When the factor income from abroad is negative ; (b) When depreciation on fixed capital exceeds income in investment; (c) When direct tax exceeds indirect tax ; (d) When subsidies exceeds indirect taxes.

Description : GDP at factor cost exceeds GDP at market price (a) When the factor income from abroad is negative ; (b) When depreciation on fixed capital exceeds income in investment; (c) When direct tax exceeds indirect tax ; (d) When subsidies exceeds indirect taxes.

Last Answer : (d) When subsidies exceeds indirect taxes. 

The excess of price a person is to pay rather than forego the consumption of the commodity is called - (1) Price (2) Profit (3) Producers' surplus (4) Consumer's surplus

Description : The excess of price a person is to pay rather than forego the consumption of the commodity is called - (1) Price (2) Profit (3) Producers' surplus (4) Consumer's surplus

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The excess of price a person is to pay rather than forego the consumption of the commodity is called (1) Price (2) Profit (3) Producers’ surplus (4) Consumer’s surplus

Description : The excess of price a person is to pay rather than forego the consumption of the commodity is called (1) Price (2) Profit (3) Producers’ surplus (4) Consumer’s surplus

Last Answer : Producers’ surplus

.If you are currently producing 100,000 units and your automation level is 10, how much will it cost you to double your capacity? a. $1,000,000 b. $4,600,000 c. $100,000 d. $10,000 e. none of the above

Description : .If you are currently producing 100,000 units and your automation level is 10, how much will it cost you to double your capacity? a. $1,000,000 b. $4,600,000 c. $100,000 d. $10,000 e. none of the above

Last Answer : b. $4,600,000

A man buys a rope from a woman for $3.00 and hands the woman a $10 bill. The woman goes into the grocery store next door to get change. She returns and gives the man $7.00. After the man leaves, the clerk from the store comes and says, 'Hey, that was a counterfeit bill you gave me.' The woman gives the clerk a good bill.How much has the woman lost? -Riddles

Description : A man buys a rope from a woman for $3.00 and hands the woman a $10 bill. The woman goes into the grocery store next door to get change. She returns and gives the man $7.00. After the man ... counterfeit bill you gave me.' The woman gives the clerk a good bill.How much has the woman lost? -Riddles

Last Answer : Seven dollars plus the rope.

A comprehensive spending pattern: A)shows the percentages of annual family expenditures allotted to general classes of goods and services B)indicates the annual amounts spent by families for specific products within a general product class C)shows the annual discretionary income of consumers D)is used to determine the precise buying power of individuals

Description : A comprehensive spending pattern: A)shows the percentages of annual family expenditures allotted to general classes of goods and services B)indicates the annual amounts spent by families for ... discretionary income of consumers D)is used to determine the precise buying power of individuals

Last Answer : A)shows the percentages of annual family expenditures allotted to general classes of goods and services

)A currency having a falling exchange rate due to continuing balance of payments deficit is called a- (1) Soft currency (2) Hard currency (3) Scarce currency (4) Surplus currency

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