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In the long run, a country's material standard of living is determined by:
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- a highly aggregated market encompassing all resources (labor, physical capital, land, and entrepreneurship) contributing to the production of current output-includes market for labor services, natural resources, and physical capital-business firm demand resource to produce goods and services-households supply labor and other resources to get income-payments made to household sum up to national income -income is used 4 tax, finance gov expenditures, buy goods and services
- For an imaginary closed economy, T = $5,000; S = $11,000; C = $50,000; and the government is running a budget deficit of $1,000. Then1)private saving = $12,000 and GDP = $67,000.2)private saving = $10,000 and GDP = $54,000.3)private saving = $10,000 and GDP = $58,000.4)private saving = $12,000 and GDP = $72,000.
- real primary government budget deficit