Interest Paid by Businesses Is

question 149

Multiple Choice

Interest paid by businesses is

• A) counted in national income, but not in GDP.
• B) not counted in GDP because it is not assumed to flow from the production of goods and services.
• C) not counted in GDP but is counted in GNP because it is paid by U.S. businesses.
• D) included in both GDP and national income.

Calculate the effect of changes in tax rates on income and government revenue.

Distinguish between progressive, proportional, and regressive tax systems.

Understand the economic consequences of government borrowing.

Identify the main categories of federal spending and sources of tax revenue.