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GDP $6,000
Gross investment 800
Net investment 200
Consumption 4,000
Government purchases of goods and services 1,100
Government budget surplus 30
What is
a. NDP? d. Disposable personal income?
b. Net exports? e. Personal saving?
c. Government taxes minus transfers?
Suppose you make a loan of $100 that will be repaid to you in 1 year. If the loan is denominated in terms of a nominal interest rate, are you happy or sad if inflation is higher than expected during the year? What if the loan instead had been denominated in terms of a real return?
Suppose you make a loan of $100 that will be repaid to you in 1 year. If the loan is denominated in terms of a nominal interest rate, are you happy or sad if inflation is higher than expected during the year? What if the loan instead had been denominated in terms of a real return?
Government spending can be financed by
matic stabilizers ? Choose one of these mechanisms and explain carefully how and why it
affects fluctuations in output.
the actual, or unadjusted, budget surplus? The text provides other names for this measure,
such as cyclically adjusted surplus and structural surplus. Why might we prefer to use these
other terms?
Assume that GDP is $6,000, personal disposable income is $5,100, and the government bud
get deficit is $200. Consumption is $3,800, and the trade deficit is $100.
a. How large is saving (S)? b. How large is investment (1)?
c. How large is government spending (G)?
Assume that GDP is $6,000, personal disposable income is $5,100, and the government bud
get deficit is $200. Consumption is $3,800, and the trade deficit is $100.
a. How large is saving (S)? b. How large is investment (1)?
c. How large is government spending (G)?
