Econ Ch 10.2 HW Q's

If government purchases are $400 million, taxes are $700 million, and transfers are $200 million, which of the following is true?

Public saving is $100 million.

In a closed economy, public saving is equal to which of the following? ( Y = GDP, C = Consumption, G = Government purchases, T = Taxes, and TR = Transfers

T - G - TR

If government saving is negative, then

T - TR < G.

There is a government budget surplus if

T - TR > G

In a closed economy, private saving is equal to which of the following? ( Y = GDP, C = Consumption, G = Government purchases, T = Taxes, and TR = Transfers)

Y + TR - C - T

In a closed economy, which of the following equations reflects investment? ( Y = GDP, C = Consumption, G = Government purchases, T = Taxes, and TR = Transfers)

Y - C - G

Under which of the following circumstances would private saving be positive in a closed economy?

Y = $10 trillion C = $5 trillion TR = $2 trillion G = $2 trillion public saving = $1 trillion

Which of the following is most liquid?

a dollar bill

Which of the following will increase investment spending in the economy, holding everything else constant?

an increase in the federal government surplus

Financial securities that represent promises to repay a fixed amount of funds are known as

bonds

When the government runs a budget deficit, we would expect to see that

investment will fall.

In a closed economy, public saving plus private saving is equal to

investment.

Consider the following data for a closed economy: Y = $12 trillion C = $8 trillion I= $2 trillion G = $2 trillion TR = $2 trillion T = $3 trillion Refer to Scenario 10-1. Based on the information above, what is the level of public saving?

negative $1 trillion (a deficit of $1 trillion) T-G-TR

In a closed economy, which of the following components of GDP is not included?

net exports

Liquidity refers to

the ease with which a financial security can be traded for cash.

There is a federal budget deficit when

the government spends more that it collects in taxes.

Consider the following data for a closed economy: Y = $12 trillion C = $8 trillion I= $2 trillion G = $2 trillion TR = $2 trillion T = $3 trillion Refer to Scenario 10-1. Based on the information above, what is the level of private saving in the economy?

$3 trillion Y+TR-C-T

What is investment in a closed economy if you have the following economic data? Y = $10 trillion C = $5 trillion TR = $2 trillion G = $2 trillion

$3 trillion Y-C-G