Question 1

Which of the following equations represents GDP for a closed economy?

Accepted Answer

A)  Y = C + I + G + T
B)  S = I - G
C)  I = Y - C + G
D)  Y = C + I + GE) A) and B)
F) C) and D)

Question 2

Suppose the economy is closed with national saving of $3 trillion,consumption of $10 trillion,and government purchases of $4 trillion.What is GDP?

Accepted Answer

A)  $3 trillion
B)  $9 trillion
C)  $11 trillion
D)  $17 trillionE) A) and B)
F) A) and C)

Question 3

The fictional country of Alpetra increases the income tax rate so that tax revenues increase by​ $30 million.In response,consumption falls by $8 million.If GDP and government spending remains the same and Alpetra is a closed economy,what is the change in investment?

Accepted Answer

A)  ​Investment increases by $8 million.
B)  ​Investment decreases by $8 million.
C)  ​Investment increases by $38 million.
D)  ​Investment decreases by $22 million.E) C) and D)
F) All of the above

Question 4

In a closed economy,national saving equals

Accepted Answer

A)  investment.
B)  income minus the sum of consumption and government purchases.
C)  private saving plus public saving.
D)  All of the above are correct.E) None of the above
F) All of the above

Question 5

Scenario 26-2.Assume the following information for an imaginary,closed economy.
GDP = $5 trillion;consumption = $3.1 trillion;
government purchases = $0.7 trillion;and taxes = $0.9 trillion.
-Refer to Scenario 26-2.For this economy,private saving is equal to

Accepted Answer

A)  $0.3 trillion.
B)  $1.2 trillion.
C)  $1.0 trillion.
D)  $1.7 trillion.E) B) and C)
F) C) and D)

Question 6

If the tax revenue of the federal government is less than its spending,then the federal government necessarily

Accepted Answer

A)  runs a budget deficit.
B)  runs a budget surplus.
C)  runs a national debt.
D)  will increase taxes.E) B) and C)
F) A) and B)

Question 7

Larry buys stock in A to Z Express Company.Curly Corporation builds a new factory.Whose transaction would be an act of investment in the language of macroeconomics?

Accepted Answer

A)  only Larry's
B)  only Curly Corporation's
C)  Larry's and Curly Corporation's
D)  neither Larry's nor Curly Corporation'sE) B) and D)
F) A) and B)

Question 8

Consider the expressions T - G and Y - T - C.Which of the following statements is correct?

Accepted Answer

A)  Each one of these is equal to national saving.
B)  Each one of these is equal to public saving.
C)  The first of these is private saving;the second one is public saving.
D)  The first of these is public saving;the second one is private saving.E) A) and C)
F) C) and D)

Question 9

The assumption of a closed economy

Accepted Answer

A)  applies to the world economy.
B)  applies to most national economies.
C)  requires us to assume that the government's budget is always balanced.
D)  All of the above are correct.E) A) and D)
F) A) and C)

Question 10

For an open economy,the equation Y = C + I + G + NX is an identity.If we define national saving,S,as the total income in the economy that is left after paying for consumption and government purchases,then for an open economy,it is true that

Accepted Answer

A)  S = I.
B)  S = 0.
C)  I = S + NX.
D)  S = I + NX.E) C) and D)
F) All of the above

Question 11

In the small closed economy of San Lorena,the currency is the denar.Statistics for last year show that private saving was 60 billion denars,taxes were 80 billion denars,government purchases of goods and services were 70 billion denars,there were no transfer payments by the government,and GDP was 400 billion denars.What were consumption and investment in San Lorena?

Accepted Answer

A)  270 billion denars,50 billion denars
B)  250 billion denars,60 billion denars
C)  260 billion denars,70 billion denars
D)  None of the above is correct.E) A) and D)
F) None of the above

Question 12

In which of the following cases would it necessarily be true that national saving and private saving are equal for a closed economy?

Accepted Answer

A)  Private saving is equal to government expenditures.
B)  Public saving is equal to investment.
C)  After paying their taxes and paying for their consumption,households have nothing left.
D)  The government's tax revenue is equal to its expenditures.E) B) and D)
F) All of the above

Question 13

When public saving falls by $2b and private saving falls by $1b in a closed economy,

Accepted Answer

A)  investment falls by $1b.
B)  investment falls by $3b.
C)  investment increases by $1b.
D)  investment falls by $2b.E) B) and C)
F) A) and B)

Question 14

Y = C + I + G + NX is an identity because

Accepted Answer

A)  each symbol identifies a macroeconomic variable.
B)  the right-hand and left-hand sides are equal when an equilibrium is reached.
C)  the equality holds due to the way the variables are defined.
D)  None of the above is correct.E) None of the above
F) A) and D)

Question 15

Which of the following is not correct?

Accepted Answer

A)  Gross domestic product is both total income in an economy and total expenditures on the economy's output of goods and services.
B)  In a closed economy net exports are zero.
C)  National saving is the sum of private saving and public saving.
D)  Purchases of capital goods are excluded from GDP.E) B) and C)
F) A) and B)

Question 16

National saving

Accepted Answer

A)  is the total income in the economy that remains after paying for consumption.
B)  is the total income in the economy that remains after paying for consumption and government purchases.
C)  is always greater than investment for a closed economy.
D)  is equal to private saving minus public saving.E) None of the above
F) C) and D)

Question 17

Which of the following restrictions implies that private saving and investment are equal for a closed economy?

Accepted Answer

A)  Consumption and private saving are equal.
B)  The economy's government is running neither a surplus nor a deficit.
C)  Private saving and public saving are both zero.
D)  No restriction is necessary;private saving and investment are equal for all closed economies.E) C) and D)
F) B) and D)

Question 18

For an economy that engages in international trade,GDP is divided into four components.Which of the following items is not one of those components?

Accepted Answer

A)  consumption.
B)  national saving.
C)  government purchases.
D)  net exports.E) None of the above
F) A) and C)

Exam 13: Saving Investment and the Financial System: Saving and Investment in the National Income Accounts

Correct Answer
verified

Which of the following is not correct?

Correct Answer
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Larry buys stock in A to Z Express Company.Curly Corporation builds a new factory.Whose transaction would be an act of investment in the language of macroeconomics?

Correct Answer
verified

Which of the following equations represents GDP for a closed economy?

Correct Answer
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Consider the expressions T - G and Y - T - C.Which of the following statements is correct?

Correct Answer
verified

National saving

Correct Answer
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In which of the following cases would it necessarily be true that national saving and private saving are equal for a closed economy?

Correct Answer
verified

The fictional country of Alpetra increases the income tax rate so that tax revenues increase by $30 million.In response,consumption falls by $8 million.If GDP and government spending remains the same and Alpetra is a closed economy,what is the change in investment?

Correct Answer
verified

The assumption of a closed economy

Correct Answer
verified

If the tax revenue of the federal government is less than its spending,then the federal government necessarily

Correct Answer
verified

For an economy that engages in international trade,GDP is divided into four components.Which of the following items is not one of those components?

Correct Answer
verified

Scenario 26-2.Assume the following information for an imaginary,closed economy. GDP = $5 trillion;consumption = $3.1 trillion; government purchases = $0.7 trillion;and taxes = $0.9 trillion. -Refer to Scenario 26-2.For this economy,private saving is equal to

Correct Answer
verified

Y = C + I + G + NX is an identity because

Correct Answer
verified

Suppose the economy is closed with national saving of $3 trillion,consumption of $10 trillion,and government purchases of $4 trillion.What is GDP?

Correct Answer
verified

When public saving falls by $2b and private saving falls by $1b in a closed economy,

Correct Answer
verified

In a closed economy,national saving equals

Correct Answer
verified

For an open economy,the equation Y = C + I + G + NX is an identity.If we define national saving,S,as the total income in the economy that is left after paying for consumption and government purchases,then for an open economy,it is true that

Correct Answer
verified

Which of the following restrictions implies that private saving and investment are equal for a closed economy?

Correct Answer
verified

Exam 13: Saving Investment and the Financial System: Saving and Investment in the National Income Accounts

Correct AnswerverifiedShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

Larry buys stock in A to Z Express Company.Curly Corporation builds a new factory.Whose transaction would be an act of investment in the language of macroeconomics?

Correct AnswerverifiedShow Answer

Which of the following equations represents GDP for a closed economy?

Correct AnswerverifiedShow Answer

Consider the expressions T - G and Y - T - C.Which of the following statements is correct?

Correct AnswerverifiedShow Answer

National saving

Correct AnswerverifiedShow Answer

In which of the following cases would it necessarily be true that national saving and private saving are equal for a closed economy?

Correct AnswerverifiedShow Answer

The fictional country of Alpetra increases the income tax rate so that tax revenues increase by​ $30 million.In response,consumption falls by $8 million.If GDP and government spending remains the same and Alpetra is a closed economy,what is the change in investment?

Correct AnswerverifiedShow Answer

The assumption of a closed economy

Correct AnswerverifiedShow Answer

If the tax revenue of the federal government is less than its spending,then the federal government necessarily

Correct AnswerverifiedShow Answer

For an economy that engages in international trade,GDP is divided into four components.Which of the following items is not one of those components?

Correct AnswerverifiedShow Answer

Scenario 26-2.Assume the following information for an imaginary,closed economy. GDP = $5 trillion;consumption = $3.1 trillion; government purchases = $0.7 trillion;and taxes = $0.9 trillion. -Refer to Scenario 26-2.For this economy,private saving is equal to

Correct AnswerverifiedShow Answer

Y = C + I + G + NX is an identity because

Correct AnswerverifiedShow Answer

Suppose the economy is closed with national saving of $3 trillion,consumption of $10 trillion,and government purchases of $4 trillion.What is GDP?

Correct AnswerverifiedShow Answer

When public saving falls by $2b and private saving falls by $1b in a closed economy,

Correct AnswerverifiedShow Answer

In a closed economy,national saving equals

Correct AnswerverifiedShow Answer

For an open economy,the equation Y = C + I + G + NX is an identity.If we define national saving,S,as the total income in the economy that is left after paying for consumption and government purchases,then for an open economy,it is true that

Correct AnswerverifiedShow Answer

Which of the following restrictions implies that private saving and investment are equal for a closed economy?

Correct AnswerverifiedShow Answer

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The fictional country of Alpetra increases the income tax rate so that tax revenues increase by $30 million.In response,consumption falls by $8 million.If GDP and government spending remains the same and Alpetra is a closed economy,what is the change in investment?

Correct Answer
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