Question :
21) In an open economy, private saving, , equal to
A) : 1303564
21) In an open economy, private saving, , is equal to
A) I – CA + (G – T).
B) I + CA – (G – T).
C) I + CA + (G – T).
D) I – CA – (G – T).
E) I + CA + (G + T).
22) Ricardian equivalence argues that when the government cuts taxes and raises its deficit,
A) consumers anticipate that they will face lower taxes later to pay for the resulting government debt.
B) consumers anticipate that they will higher services from the government.
C) consumers anticipate that they will face higher taxes later to pay for the resulting government debt.
D) consumers anticipate it will affect their future taxes, in general in the direction of lowering future taxes.
E) consumers anticipate that the low tax rates will continue.
23) Ricardian equivalence argues that when the government
A) increases taxes and raises its deficit, consumers anticipate that they will face higher taxes later to pay for the resulting government debt, thus people will raise their own private saving to offset the fall in government saving.
B) cuts taxes and decreases its deficit, consumers anticipate that they will face higher taxes later to pay for the resulting government debt, thus people will raise their own private saving to offset the fall in government saving.
C) cuts taxes and raises its surplus, consumers anticipate that they will face higher taxes later to pay for the resulting government debt, thus people will raise their own private saving to offset the fall in government saving.
D) cuts taxes and raises its deficit, consumers anticipate that they will face lower taxes later to pay for the resulting government debt, thus people will raise their own private saving to offset the fall in government saving.
E) cuts taxes and raises its deficit, consumers anticipate that they will face higher taxes later to pay for the resulting government debt, thus people will raise their own private saving to offset the fall in government saving.
24) In the United States over the past fifty years, the fraction of GNP devoted to consumption has fluctuated in a range of about
A) 42 to 49 percent.
B) 32 to 39 percent.
C) 22 to 29 percent.
D) 82 to 89 percent.
E) 62 to 70 percent.
25) In the United States, (gross) investment has fluctuated between ________ of GNP in recent years.
A) 2 and 12 percent
B) 11 and 22 percent
C) 22 and 32 percent
D) 32 and 42 percent
E) 42 and 52 percent
26) Government purchases currently take up about
A) 20 percent of U.S. GNP, and this share has not changed much since the late 1950s.
B) 38 percent of U.S. GNP, and this share has not changed much since the late 1950s.
C) 18 percent of U.S. GNP, and this share has been increasing since the late 1950s.
D) 18 percent of U.S. GNP, and this share has been decreasing since the late 1950s.
E) 25 percent of U.S. GNP, and this share has been decreasing since the late 1950s.
27) The position of the United States current account balance in 2009 was
A) lent over 6 percent of its GNP, resulting in a large current account surplus.
B) borrowed over 9 percent of its GNP, leading to a large current account deficit.
C) achieved a currant account balance of zero.
D) borrowed over 10 percent of its GNP, leading to a large current account deficit.
E) borrowed less then 5 percent of its GNP, leading to a large current account surplus.
28) Which one of the following statements is FALSE?
A) The United States had accumulated substantial foreign wealth by the early 1980s.
B) The 1980s witnessed a sustained current account deficit of proportions unprecedented in the twentieth century opened up.
C) In 1987, the country became a net debtor to foreigners for the first time since World War I.
D) U.S. foreign debt has continued to grow and now stands at 25 percent of GNP.
E) The U.S. foreign debt was paid off in the 1990s, allowing the U.S. to attain a current account surplus. However, the deficit has returned in recent years.
29) What is the national income identity for a closed economy?
30) What is the national income identity for an open economy?
