For each of the following scenarios, state the effect on the debt-to-GDP ratio:
a. The growth rate of the labor force increases.
b. The primary deficit increases.
c. Total factor productivity decreases.
d. Seigniorage decreases.
e. The nominal interest rate is constant and the growth rate of the money supply increases.
f. The nominal interest rate is not constant and the growth rate of the money supply increases.
a. If the growth rate of the labor force increases, the debt-to-GDP ratio will decrease.
b. If the primary deficit increases, the debt-to-GDP ratio will increase.
c. If total factor productivity decreases, the debt-to-GDP ratio will increase.
d. If seigniorage decreases, the debt-to-GDP ratio will increase.
e. If the nominal interest rate is constant and the growth rate of the money supply increases, the debt-to-GDP ratio will decrease.
f. If the nominal interest rate is not constant and the growth rate of the money supply increases, the debt-to-GDP ratio will be ambiguous.
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Which of the following will happen if there is a fall in the supply of credit in an economy without any change in the demand for credit?
A) The real output will fall. B) The labor demand in the economy will increase. C) Its consumption expenditure will increase. D) The real interest rate will fall.
The more bidders there are at a second-price auction,
a. the higher the expected selling price b. the higher each bidder bids c. the more each bidder will shade his bid d. the less each bidder will shade his bid
If the U.S. price level decreased relative to price levels in foreign countries, what would be the impact on domestic aggregate supply and aggregate demand curves?
a. the aggregate supply curve would shift outward and the aggregate demand curve would remain unchanged b. the aggregate supply curve would shift inward and the aggregate demand curve would remain unchanged c. the aggregate demand curve would shift outward and the aggregate supply curve would remain unchanged d. the aggregate demand curve would shift inward and the aggregate supply curve would remain unchanged e. the domestic aggregate demand and supply curves would remain unchanged
Which statement is FALSE?
A. Less than 5% of the entrepreneurs and higher-level employees in Silicon Valley come from overseas. B. The upper strata of the American work force is very well educated. C. Immigration is restricted to approximately 800,000 people a year. D. The immigration and Naturalization Service (INS) has stopped picking up illegal aliens, allowing them to help American employers fill jobs.