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Chapter 13 Questions

Chapter 13 Questions . 39.Would increased corporate borrowing indicate good news or bad news for the economy?.

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Chapter 13 Questions

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  1. Chapter 13 Questions

  2. 39.Would increased corporate borrowing indicate good news or bad news for the economy? Corporate borrowing would indicate good news because the national income ( total income earned by everyone in the economy) would be increased, most likely due to an increase in job opportunities.

  3. 40.What is “disposable personal income”? • Income remaining for people to spend or save after all taxes have been paid P.348 Example: The money you can use to spend on anything you want (rent, food, cars, housing items, etc.) once you have paid income tax.

  4. 41.What four economic activities are computed in the Gross Domestic Product (GDP)? P.346 • 1) Consumer Sector-bought by consumers for their direct use. • 2) investment Sector-business purchases of tools, machines, buildings, and so on, used to produce other goods. • 3)Government Sector- the goods and services bough by federal, state , and local governments range from paper clips to jets. • 4) net exports-the difference between what the nation sells to other countries and what it buys from other countries. exports/imports Example:1)personal computers 2) Factory machines 3) Federal Jets 4)$$ from Exports – $$ from imports

  5. 42.What happens when the business cycle enter contraction? -business activity begins to slow down and the GDP begins to also decline. (page361 ) Ex. The recession

  6. 43. What are transfer payments? • Welfare payments and other assistance payments such as unemployment compensation social security or Medicaid (page 348)

  7. 44.What is the consumer price index? • Every month when the government measures the change in price of a specific group of goods and services that the average household uses. (page 351) • Ex. The census or taking inventory at a store

  8. Chapter 14

  9. 45. What is a “medium of exchange?” • Medium of exchange is the use of money in exchange for goods or services.Pg.376 • Example: going to a store and buying things.

  10. 46. What does it mean when someone refers to money as being “durable?” • It means that old dollar bills are easily replaced and in contrast coins last for years.pg.378 • Example: IN, the money making process old money gets destroyed and new money gets printed out.

  11. 47. What is a drawback to “electronic banking?” • The drawback is the possibility of tampering and lack of privacy are increased because all records are stored in a computer.pg.385 • Ex: Someone can hack into their computer to take their money and identity.

  12. 48. What is the M1 definition of money supply? • Consists of money that can be spent immediately and against which checks can be written.pg.391 • Ex:

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