Refer to Table 23-1. Using the table above, compute aggregate expenditure and identify the macroeconomic equilibrium
What will be an ideal response?
The macroeconomic equilibrium is determined where aggregate expenditure = real GDP. The value for aggregate expenditure (C + I + G + NX) for each level of real GDP is given in the table below. The value where real GDP equals aggregate expenditure is $5,000, and this is equilibrium.
Real GDP Aggregate Expenditures
$4,000 $4,200
4,500 4,600
5,000 5,000
5,500 5,400
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The Laffer curve illustrates that
A) high tax rates could lead to lower tax revenues if economic activity is severely discouraged. B) lowering tax rates will always decrease tax revenues. C) lowering tax rates will always increase tax revenues. D) high tax rates would increase tax revenue and increase the labor supply as people work harder to maintain their standard of living.
Limited liability is a benefit to
A) sole proprietorships. B) partnerships. C) corporations. D) All of the above.