Table 131Canada's Saving,Investment,Import,and Export Functions (In Billions of Dollars) Under a a System

question 39

Multiple Choice

Table 13.1.Canada's Saving,Investment,Import,and Export Functions (in billions of dollars) Under a System of Fixed Exchange Rates
Export Function X = 3000
Investment Function I = 1000
Saving Function S = -1000 + 0.2Y
Import Function M = 500 + 0.25Y
-Refer to Table 13.1.If improved business optimism leads to increases in Canada's planned investment spending from $1000 billion to $1200 billion,Canada's equilibrium income rises by approximately:

• A) $444 billion
• B) $555 billion
• C) $666 billion
• D) $777 billion

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Definitions:

General Obligation Bonds

Bonds issued by municipalities that are backed by the full faith and credit of the issuing government, promising to repay the debt with general revenue.

Revenue Bond

A type of municipal bond supported by the revenue from a specific project, such as a toll bridge or highway.

State Income Taxes

Taxes imposed on income by individual states, varying in rates and structures, applicable to income earned by residents and, in some cases, non-residents working in the state.

U.S. Treasury Bonds

Long-term government debt securities issued by the U.S. Department of the Treasury with a maturity of more than ten years, offering periodic interest payments to investors.