In GDP, the largest dollar amount is
a) consumer spending
b) rental payment
c) net exports of goods and services
d) gross private domestic investment
e) government purchase of goods and services
Ans: a) consumer spending
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What are the macroeconomic consequences of a budget deficit when the economy is operating at full employment? Be sure to discuss the effects in the short-run and in the long-run
What will be an ideal response?
If net taxes are cut, consumer
a. spending is not affected b. spending increases by the amount of the tax cut c. spending increases by an amount less than the full amount of the tax cut d. saving increases by the full amount of the tax cut e. spending increases by two-thirds of the amount of the tax cut and consumer saving increases by one-third of the amount of the tax cut