List three bogus arguments about the "burden of the debt," and point out the errors in each of the arguments
Argument 1: The debt will burden future generations.
Error: While it is true that a higher debt will require higher interest payments in the future, the recipients of those interest payments will also be the future generation. Repayment of the debt and interest payments will merely be a transfer between members of the future generations. As long as the debt is held by U.S. citizens, this argument is false.
Argument 2: Repaying the enormous debt will ruin the nation.
Error: Unlike an individual or a family, the federal government does not have a finite life. Therefore, like large corporations, the federal government need never repay the debt. It can continue to "roll over" its debt infinitely.
Argument 3: Like any family or business the nation has a limited capacity to borrow and may go bankrupt if the debt becomes too large.
Error: This is a false analogy for two reasons. First, the government has the entire macroeconomy as a base for raising revenue through taxation. And secondly, the federal government has the unique ability to print money necessary for making debt payments. While this would be inflationary, it eliminates Argument 3 as a burden of the debt.
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Suppose Canada has a population of 30 million people and a labor force participation rate of 2/3. Furthermore, suppose the natural rate of unemployment in Canada is 7%. If the current number of unemployed people is 1.4 million people, what can we conclude about Canada's economy?
A. The unemployment rate is above the natural rate of unemployment. B. The unemployment rate is below the natural rate of unemployment. C. There is cyclical unemployment present in the economy. D. There is no cyclical unemployment present in the economy.
Refer to Figure 4-3. If the market price is $3.50, what is the consumer surplus on the first ice cream cone?
A) $0 B) $0.50 C) $3.50 D) $9.00
A shift in supply means a change in the quantity supplied at _______ price(s).
a. low b. high c. no d. every
An economics professor, upset about the rising cost of textbooks, proposed that his department purchase 50 copies of a statistics book so the students in the statistics class would not have to purchase their own books but rather could borrow a book for the semester and then return it for the next class to use. Which of the following strategies would not prevent a common resource problem with the
textbooks? a. Students will be required to pay a deposit for the textbook, which is refundable at the end of the semester when the book is returned in good condition. b. The textbooks are placed in a common area of the department so students can borrow and return them as needed. c. Students must sign a form agreeing to return the book or pay a fine equal to the replacement cost of the book. d. The textbooks are placed in the professor's office and will only be given to students who are registered members of the class. These students will not receive their final course grades until the books are returned.