The opportunity cost of the debt is
A. Not an issue if the debt is financed internally.
B. The decrease in public sector output because of government borrowing.
C. The interest payments on the debt.
D. Less of an issue if the economy is below full employment since crowding out is less likely to occur.
Answer: D
You might also like to view...
A rise in the real interest rate will cause which of the components of aggregate demand to decline?
A) Only C B) Only C and I C) Only C, I, and NX D) C, I, G, and NX
Which of the following assumptions is TRUE about monopolistic competition?
A) The firm's products are differentiated. B) There are few producers of the product. C) Firms will not advertise. D) It is difficult for firms to enter this industry.
The stagflation of the 1970s is generally attributed to
a) the Cold War arms race b) the introduction of large-scale computer systems into business c) the opening of US markets to Japanese automobiles d) increases in oil prices e) changing cultural values regarding work and leisure
Government can overcome the free rider problem by collecting taxes and using the funds to provide individuals with nonexcludable public goods that they want to buy but the market cannot provide.
Answer the following statement true (T) or false (F)