A direct cost of public debt is:
A. it can pay for investments that will lead to economic growth in the long run.
B. the interest the government has to pay to the people it has borrowed from.
C. it allows the government to be flexible when something unexpected happens.
D. All of these are costs to holding public debt.
Answer: B
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The Marginal Propensity to Consume (MPC) is defined as the change in
a. C over the change in DI. b. income over the change in disposable income. c. DI over the change in C. d. total income over the change in net income.
Who buys and sells in the Fed funds market?
A. Financial institutions and large corporations B. Anyone with a computer and an Internet connection can participate C. Only commercial banks and depository institutions D. All large financial institutions
The threat of punishment in a repeated game tends to:
A. reduce the incentive to break a pricing agreement. B. anger the other firms, resulting in a price war. C. maintain prices at the duopoly price level. D. deter entry.
An example of human capital would be:
A. a training session on Excel. B. an office chair. C. Excel software. D. All of these are examples of human capital.