When the government's budget deficit increases
a. the government is borrowing less and public savings falls.
b. the government is borrowing less and public savings increases.
c. the government is borrowing more and public savings falls.
d. the government is borrowing more and public savings increases.
c
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People expect an inflation rate of 5 percent and the real interest rate is positive. Consequently the nominal interest rate will be
A) more than 5 percent. B) 5 percent. C) less than 5 percent. D) Without more information it is impossible to tell if the nominal interest rate will be more than, less than, or equal to 5 percent.
Nominal GDP is the value of final goods and services
A) at the prices of that year. B) at the prices of the immediately previous year. C) at the prices of a base year. D) produced in foreign countries but consumed in the domestic country.
The paradox of value refers to the fact that
A) different consumers value the same items differently. B) the value of a good depends on its total utility. C) water costs little, while diamonds cost a lot. D) water brings little consumer surplus.
Refer to above Table 2-1. What is the total amount of leakages?
A) 530 B) 1080 C) 970 D) 550