1. In 2012, the government increased its debt by $50 billion and it spent $350 b
ID: 1126008 • Letter: 1
Question
1. In 2012, the government increased its debt by $50 billion and it spent $350 billion. How much tax revenue did the government collect in 2012?
Select one:
a. $400 billion
b. $350 billion
c. $300 billion
d. $250 billion
e. It is impossible to determine
2.Which of the following will be counted as part of the U.S.'s GDP for a given year?
Select one:
a. An antique (old) clock that is sold in a flea market
b. A Ford focus that is produced in Germany and sold in Belgium
c. Paint purchased by a family in Lowe's to paint their house
d. Nails that are purchased by a local construction company to build a house
e. A babysitting service by a teenager that is never reported to the IRS
3. In 2003, the Fed lowered the Federal Funds Rate all the way to 1%, which fueled a destructive housing bubble that eventually led to a financial crisis. Which school of thought would argue that the government made things worse by lowering interest rates?
Select one:
a. Supply-side economists
b. Classical economists
c. Constitutional economists
d. Keynesian economists
e. Monetarists
4. Which one of the following statements is generally correct?
Select one:
a. Highly developed economies tend to grow by 5% or more every year
b. Many Less Developed Economies are located in Europe
c. Transition economies grow at a slower rate than Less Developed Economies
d. Less Developed Economies produce mainly services and high-tech products
e. Transition economies tend to have a GDP per Capital between $5,000 and $25,000
Explanation / Answer
Ans:
1) Option C - $300 billion
Tax revenue = amount spent - debt increased
= $350 billion - $50 billion
= $300 billion
2) Option C
Paint purchased by a family in Lowe's to paint their house
GDP is the market value of final goods and services produced in U.S. Hence intermediate products are not included in the GDP.