Consider a Small Economy with 3 Individuals Where Each Individual

question 110

Multiple Choice

Consider a small economy with 3 individuals where each individual produces and sells $1000 worth of final goods and services.The national income for this economy is

• A)$3000.
• B)less than $3000 if some of the income is saved.
• C)more than $3000 if some of the income is invested.
• D)less than $3000 if there are taxes in this economy.
• E)more than $3000 if the individuals are earning profits.

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Definitions:

Deposits

Funds placed into an account at a financial institution for safekeeping or as a pledge for future repayment.

Compounded Semiannually

The process of calculating interest on both the initial principal and the accumulated interest of previous periods on a semiannual basis.

Single Investment

Single investment refers to an investment in only one asset or security, rather than diversifying across multiple investments.

Annual Interest Rate

The Annual Interest Rate is the percentage of interest that is charged or earned on an investment, loan, or savings account over the span of a year.