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If taxes and government expenditures were constant and did not vary with income, then: A. passive deficits would increase. B. structural deficits would increase. C. passive deficit
Q. Explain Growth theory? The purpose of this topic is to try to explain growth in GDP. The models in this topic are very different from the rest of the models as they use only
Q. Investment demand of the AS-AD model? Investment demand. As long as we keep nominal interest rate (and thus real interest rates) constant, there is no reason for demand for
Suppose that Lilistan has two types of citizens: low-income citizens (income = $20,000) and high-income citizens (income = $80,000). Interest income is currently taxed and each typ
The circular flow of income in a closed economy A closed economy exists when there is no international trade. We shall also assume that in this particular closed economy there
Aggregate Consumption This is the aggregate of all expenditures on current consumption goods and services i.e. those which are consumed during the period. Living standards are
Q. How much money can banks create? Does that mean that banks can create an unlimited amount of money? No the answer is no - it would require them to lend an unlimited amount o
describe national income
In 2009, ABC Company made $2M of net profit and spent $100,000 on advertisement. In 2010, it made $2.5M of net profit and spent $150,000 of advertisement. Based on this information
A financial manager wants to design an investment portfolio for a client. The client has $50,000 available to invest, and the planner has identified four investment options for the
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