Answer the next question using the following budget information for a hypothetical economy. All data are in billions of dollars. Also assume that all budget surpluses are used to pay down the public debt. Government SpendingTax RevenuesGDPYear 1$800$825$4,000Year 28508504,200Year 39008754,350Year 49509004,500Year 51,0009254,600Assume that year 1 is the first year for this economy and year 3 is the current year. What is the public debt in this economy at year 3?
A. $75 billion
B. $50 billion
C. $25 billion
D. $0 billion
Answer: D
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Whenever a firm is making positive economic profit, there is nothing it can do to make more profit.
Answer the following statement true (T) or false (F)
What determines the acceptability of dollar bills as a medium of exchange?
A) our society's willingness to use green paper notes issued by the Federal Reserve as money B) the willingness of the Federal Reserve to redeem dollar bills for gold C) the willingness of the U.S. Treasury to redeem dollar bills for gold D) the public's fear that failing to accept dollar bills will trigger a hyperinflation
(Refer to the figure provided in the text.) For the share of income spent on food to remain constant as income rises, the Engel curve must
a. lie above the 45-degree line. b. lie below the 45-degree line. c. be equal to the 45-degree line. d. bisect the 45-degree line.
Suppose the price of a product is less than its average variable cost. When the firm's fixed obligations are completely ended, it will now most likely:
a. make an economic profit. b. go out of business. c. expand to a bigger operation. d. continue to be shut down. e. break even.