quiz2.a.ak - Macroeconomics 302a,b,d Macro Quiz 2a 1...

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Macroeconomics 302a,b,d Prof. Nilsen l 1 Macro Quiz 2a 1. Desired national saving equals (a) Y C d G . (b) C d + I d + G . (c) I d + G . (d) Y – I d G. Answer: A 2. With a nominal interest rate of 4%, an expected inflation rate of 1%, and interest income taxed at a rate of 25%, what is the expected after-tax real interest rate? 3. The Ricardian equivalence proposition suggests that a government deficit caused by a tax cut 4. If the United States sells computers to Russia, and uses the proceeds to buy shares of stock in Russian companies, the U.S. trade balance ________ and the U.S. capital and financial account balance _________. 5. Suppose output is $1000 billion, government purchases are $200 billion, desired consumption is $700 billion, and desired investment is $150 billion. Net foreign lending would be equal to
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