The difference between the government debt and the budget deficit is...
What will be an ideal response?
the budget deficit shows the annual discrepancy between government spending and tax revenue and the government debt shows the accumulated balance of past government debts
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Which of the following would cause the equilibrium price of ketchup to increase and the equilibrium quantity of ketchup to decrease?
A) an increase in the price of mustard, a substitute for ketchup B) a decrease in the price of tomatoes C) an increase in the price of tomatoes D) an increase in the price of french fries, a complement for ketchup
When the coupon rate on newly issued bonds increases from 5% to 6%, the prices of existing bonds:
A. increase. B. remain unchanged. C. increase only if the coupon rate is less than 6%. D. decrease.
To test their theories, economists usually have to
A) set up careful laboratory experiments with all variables controlled. B) first examine theory and compare it with what happened in the past in the real world. C) use only models that have a proven record of success. D) conduct experiments that involve people who do not behave rationally.
Long-run aggregate supply shocks are not a source of business cycle fluctuations in the ________, because ________
A) traditional Keynesian model; long-run supply shocks are incompatible with adaptive expectations B) traditional Keynesian model; demand fluctuations are considered of dominant importance C) real business cycle model; shocks cannot persist in the long run, when prices and wages are flexible D) new Keynesian model; such shocks are anticipated by forward-looking consumers and firms