Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Question
Chapter 4, Problem 2E
To determine
The sector (households, business, or international) that spends the most, the sector that spends the least and the sector having the highest volatility of spending.
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Which sector (Households, Businesses, or International) spends the most? Which sector spends the least? Which sector, because of its volatility, has an importance greater than is warranted by its size?
What is the impact of spending changes on GDP?
By How Much Will U.S. GDP Grow Next Year?
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- Why do you suppose that U.S. GDP is so much higher today than 50 or 100 years ago?arrow_forwardBelow is economic data for Germany for 2016 (measured in billions of current euros). What was total spending? Consumption Investment 1,649.79 636.42 Government spending 620.01 1,442.41 1,211.64 Exports Importsarrow_forwardWhat factors can lead to an increase in a country's Gross Domestic Product (GDP)?arrow_forward
- If the United States introduces universal child care, what will likely happen to GDP? Explain fully why you expect the effect. Will this increase/decrease overall public welfare? Why?arrow_forwardIs a family a household? Is a household a family? Which sector (Households, Businesses, or International) spends the most? Which sector spends the least? Which sector, because of its volatility, has an importance greater than is warranted by its size? What does it mean if net exports are negative? People sometimes argue that imports should be limited by government policy. Suppose a government quota on the quantity of sugar to be imported to the United States occurs. What is likely to happen to the price of sugar in the United States and in the rest of the world? List the four sectors of the economy along with the type of spending associated with each sector. Order the types of spending in terms of magnitude, and give an example of each kind of spending. Using the interconnection between sectors of the economy, explain the effects of imposing an increase in taxes on the household sector.arrow_forwardIs it reasonable or does it make sense, that while US exports are added to GDP, US imports are subtracted from GDP?arrow_forward
- Recessions hit parts of the economy differently. What part of the economy is usually hurt the most during a recession? Durable goods. Non-durable goods Consumer non-durable goods Consumer services like dentist appointmentsarrow_forwardWhat happens to each sector of the economy when recession occurs?arrow_forwardUse the information in the table to answer the following questions. All numbers are in billions of 2012 dollars. Real GDP (Y) Consumption (C) Planned Investment (I) Government Purchases (G) Net Exports (NX) $15,000 $11,750 $1,500 $3,000 -$500 $16,000 $12,500 $1,500 $3,000 -$500 $17,000 $13,250 $1,500 $3,000 -$500 $18,000 $14,000 $1,500 $3,000 -$500 $19,000 $14,750 $1,500 $3,000 -$500 The equilibrium level of GDP is $ 18,000 billion. The MPC is (enter your response to two decimal places).arrow_forward
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