Question

#10 If an economy’s GDP rises, then it must be the case that the economy’s a....

#10

If an economy’s GDP rises, then it must be the case that the economy’s

a. income rises and saving falls.
b. income and saving both rise.
c. income rises and national expenditure falls.
d. income and national expenditure both rise.

Answer is D; why is that? Why doesn't savings have an effect? What is national expenditure exactly, what does it include? Like GDP is Y = C + I + G + (NX); what is national expenditure in terms of stuff like that?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
The gross domestic product (GDP) of a country is given by the following equation:
GDP = C(Consumption) + G (Government spending) + I (Business Investment,Capital Investment) + X (net exports)
and Private savings = National investment.
When income rises C (consumption) and I (private savings/national investment) increases. In addition, national expenditure is associated
with G(government spending). Three of the components of GDP are increasing when income and national expenditure rise.
D) income and national expenditure both rise.
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
If GDP rises: A. income and production must both rise. B. income and production must both...
If GDP rises: A. income and production must both rise. B. income and production must both fall. C. income must rise, but production may rise or fall. D. none of the above.
If the government wants to increase the economy’s GDP levels, it could     A) decrease government expenditures....
If the government wants to increase the economy’s GDP levels, it could     A) decrease government expenditures. B) increase taxes. C) decrease government expenditures and increase taxes. D) increase government expenditures. E) None of the above. If the government wants to decrease the economy’s GDP levels, it could A) increase taxes.                                                     B) increase government expenditures. C) wait for inflationary pressure to come.                 D) decrease government expenditures. E) None of the above. Contractionary fiscal policy is designed to    A) raise the price level only.                                     B)...
Saving and net flows of capital and goods In a closed economy, saving and investment must...
Saving and net flows of capital and goods In a closed economy, saving and investment must be equal, but this is not the case in an open economy. In the following problem, you will explore how saving and investment are connected to the international flow of capital and goods in an economy. Before delving into the relationship between these various components of an economy, you will be asked to recall some relationships between aggregate variables that will be useful in...
1. Consider an economy that produces and consumes bread and automobiles. In the table below are...
1. Consider an economy that produces and consumes bread and automobiles. In the table below are data for two different years: Year 2010 Year 2025 Price of an automobile $50,000 $60,000 Price of a loaf of bread $10 $20 Number of automobiles produced 100 120 Number of loaves of bread produced 500,000 400,000 Using the year 2010 as the base year, compute the following: nominal GDP, implicit price deflator and the CPI. 2. Assume that GDP (Y) is 5,000. Consumption...
Suppose that in a closed economy GDP is equal to 11,000, taxes are equal to 2,500,...
Suppose that in a closed economy GDP is equal to 11,000, taxes are equal to 2,500, transfer payments are equal to 500, consumption equals 7,500 and government purchases equal 2,000. What are private saving, public saving, and national saving? a. 1,500, 0, and 1500, respectively b. 1,000, 500, and 1,500, respectively c. 500, 1,500, and 1,000, respectively d. None of the above is correct During the current quarter, a firm produces consumer goods and adds some of those goods to...
Consumers change their purchases and move ALONG the same consumption function when: Their income changes Their...
Consumers change their purchases and move ALONG the same consumption function when: Their income changes Their tastes change The price level changes All of the above.       12) If MPC is .75 then if consumer income rises by $10,000 we would predict that consumption will: A. rise by $7500 while savings fall by $2500. B. fall by $2500 while savings rise by $7500. C. rise by $7500 while savings rise by $2500. D. fall by $2500 while savings fall by...
1.the text's analytical model assumes that the following are functions of current income a. consumption b....
1.the text's analytical model assumes that the following are functions of current income a. consumption b. exports c.imports d. government expenditure e. both consumption and imports 2. suppose that a hypothetical economy has consumption function of c=200+0.8Y, investment equal to 300, government purchases equal to 500, exports equal to 240 and in import function im=40+0.1Y. what is the level of income when the economy in equilibrium? a.1800 b.4000 c.2000 d.4400 e.1400 3. An aggregate expenditure function illustrates that as national...
I have the solutions but want to be sure. Please don't answer if you are not...
I have the solutions but want to be sure. Please don't answer if you are not sure. 1.     Aggregate supply increases when ________. A.    the price level rises B.    the money wage rate falls C.    consumption increases D.    the money price of oil increases         2.     When potential GDP increases, _______. A.    aggregate demand increases B.    aggregate supply increases C.    both aggregate demand and aggregate supply increase D.    the price level rises         3.     The quantity of real GDP demanded...
2) . Suppose that consumer spending initially rises by $5 billion for every 1 percent rise...
2) . Suppose that consumer spending initially rises by $5 billion for every 1 percent rise in household wealth and that investment spending initially rises by $20 billion for every 1 percentage point fall in the real interest rate. Also assume that the economy’s multiplier is 4. If household wealth falls by 5 percent because of declining house values, and the real interest rate falls by two percentage points, in what direction and by how much will the aggregate demand...
1. Which of the following is FALSE about GDP? Group of answer choices GDP is considered...
1. Which of the following is FALSE about GDP? Group of answer choices GDP is considered one of the most important stats of an economy GDP can be used to at least informally determine whether a country is in recession When a country’s economic stats are presented, the first stat is often GDP GDP was invented by Franklin D. Roosevelt just after World War 2 ended GDP is not exactly the same as GNP 2. Again, consider the market for...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT