Refer to Table 19-32. The table above represents hypothetical ...

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Refer to Table 19-32. The table above represents hypothetical data from the National Income Accounts for 2015. Use the data to calculate personal income and disposable income.
 
  What will be an ideal response?

Question 2

Refer to Figure 27-1. Suppose the economy is in a recession and expansionary fiscal policy is pursued. Using the static AD-AS model in the figure above, this would be depicted as a movement from
 
  A) C to B. B) A to B. C) A to E. D) B to C. E) B to A.

[bobsmith]

Answer to Question 1

Personal income = National income - Retained earnings + Transfer payments + Interest on government bonds.
Substituting the table values:
Personal income = 11,200 - 560 + 2,200 + 300
= 13,140 billion.

Disposable personal income = Personal income - Personal taxes
= 13,140 - 1,400 = 11,740 billion.

Answer to Question 2

B

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Excellent

[dantucker]

Gracias!