Exhibit 11-10 GDP data (billions of dollars)
Indirect business taxes$ 600
Depreciation950
Change in business inventories50
Compensation of employees5,400
Corporate profits700
Durable goods600
Exports100
Social Security taxes360
Transfer payments300
Fixed investment950
Government spending800
Imports150
Net interest500
Nondurable goods2,000
Personal taxes1,000
Rental income200
Services4,000
In Exhibit 11-10, and using the expenditures approach, compute net exports (X-M). Which of the following is correct?
A. $500 billion.
B. $150 billion.
C. $100 billion.
D. -$50 billion.
Answer: D
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An import tariff will cause the relative demand for ________ to ________ and the relative supply for ________ to ________
A) imports; decrease; imports; increase B) imports; increase; imports; decrease C) exports; increase; exports; decrease D) exports; decrease; exports; increase E) exports; increase; imports; decrease
Which statement is false?
A. Under Soviet communism, government planning was substituted for the price mechanism. B. The entire Soviet economy was a Rube Goldberg contraption of subsidies, fixed prices, bureaucratic rules and regulations, special privilege, and outright corruption. C. Had Mikhail Gorbachev not begun dismantling the communist bureaucracy, the Soviet system probably would have been able to continue carrying on business as usual for another century. D. None of the statements are false.