What is the relationship between federal deficits and debt?
a. Deficits are the difference between revenue and spending in one year.
b. Deficits are the accumulation of past debt.
c. Debt is the difference between revenue and spending in one year.
d. Debt is the accumulation of past deficits.
d. Debt is the accumulation of past deficits.
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The simplified Keynesian model
A) holds the price level constant. B) holds real GDP constant. C) assumes investment and saving are always equal. D) assumes unemployment is unrelated to real GDP.
The interest rate in the federal funds market
a. is determined by the imposition of price controls imposed by the Fed. b. will tend to rise when the quantity of funds demanded by banks seeking additional reserves exceeds the quantity supplied by banks with excess reserves. c. will tend to fall if the Fed sells bonds and, thereby, reduces the reserves available to banks. d. is an interest rate that is largely unaffected by the policies of the Fed.
Taylor spends all of her income on tank tops and running shoes, and the price of a pair of running shoes is four times the price of a tank top. In order to maximize total utility, Taylor should buy
a. four times as many tank tops as pairs of running shoes. b. four times as many pairs of running shoes as tank tops. c. both items until the marginal utility of a pair of running shoes is four times the marginal utility of a tank top. d. both items until the marginal utility of a tank top is four times the marginal utility of a pair of running shoes.
Each of the following is an example of capital, except
A. an office building. B. gold. C. an assembly line. D. a computer system.