Assume in a Private Closed Economy That the Equilibrium Level

question 30

Multiple Choice

Assume in a private closed economy that the equilibrium level of income is $380 and the MPS is .25.Now suppose government collects taxes of $50 and spends the entire amount.As a result:

• A) the equilibrium level of real income and the price level will both remain unchanged.
• B) the equilibrium level of income will remain unchanged.
• C) the equilibrium level of income will rise to $420.
• D) the equilibrium level of income will rise to $430.

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Definitions:

Franchises

Licensing arrangements whereby an individual or company can use a firm's business model and brand for a prescribed period.

Salaried Manager

A manager who is compensated with a fixed salary rather than an hourly wage.

Monitoring

The process of overseeing activities or performance, often used in contexts like employee performance, quality control, or compliance with regulations.

Franchisor Fee

A payment made by a franchisee to a franchisor, typically for the right to use the franchisor's trademark, operational system, and ongoing support.