The conventional view among economists is that persistent budget deficits lead to a ________ capital stock and a ________ level of potential GDP in the long run
A) larger; higher
B) larger; lower
C) smaller; higher
D) smaller; lower
D
You might also like to view...
The Fed decreases the quantity of money to counteract
A) positive net exports. B) a federal budget deficit. C) a rise in the unemployment rate. D) a recessionary ga
The size of the money multiplier depends upon all of the following EXCEPT
A) the required reserve ratio. B) the currency-deposit ratio. C) excess reserves relative to deposits. D) the discount rate.
Ace has always been a top student, so it was no surprise he won a $1,500 scholarship from the company where he worked summers to help with college expenses. Ace decides to spend his scholarship money on a new Apple MacBook. How will GDP be affected by Ace's recent purchases?
A. Consumption will go up by $1,500, because a computer is a nondurable good. B. Consumption will go up by $1,500, because a computer is a durable good. C. Investment will go up by $1,500, because a computer is a durable good. D. GDP will not be affected, since Ace acquired the computer with scholarship money.
Last year a country's real GDP grew by 4%, it's inflation rate was 2.5%, and it's government budget deficit was about $250 billion. It's debt to GDP ratio was unchanged. About what was it's debt at the start of last year?
a. 16.7 trillion b. 10.0 trillion c. 6.25 trillion d. 3.85 trillion