Would the circular flow of economic activity contract if the government spends

ezora

wrote...

9 years ago Edited: 9 years ago, bio_man

Would the circular flow of economic activity contract if the government spends

Would the circular flow of economic activity contract if the government spends more than in taxes?
Why is it important to convert the GDP and national income to constant dollar value when using them as measures of economic welfare?
What is the difference between a cyclical fluctuation and a trend?

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padre

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Staff Member

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9 years ago

Quote from: ezora (9 years ago)

Why is it important to convert the GDP and national income to constant dollar value when using them as measures of economic welfare?

GDP does not include transfer payments such as interest and dividends, pensions, or other social security benefits.

Quote from: ezora (9 years ago)

What is the difference between a cyclical fluctuation and a trend?

The Trend is the increase or decrease in the series over a long period of time. For this reason is also known as the long-term trend.

The Cyclical Fluctuation is the wavelike up and down fluctuations about the trend that is attributable to economic or business conditions. This fluctuation is also known as business cycle. During economic expansion, the cycle lies above the trend; during a downturn, beneath it.

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ezora Author

wrote...

9 years ago Edited: 9 years ago, ezora

The Fifth National Bank has total deposits of $20,000,000 and has legal reserves of 5,000,000. If the legal reserve is 10 percent, is the bank at its lending capacity?

Post Merge: 9 years ago

What is the effect of the FOMC’s purchasing securities from individuals versus its purchasing them from banks, insofar as the expansion of money is concerned?

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