When government runs a budget deficit, it makes up the difference by:
A. issuing government bonds.
B. paying down outstanding debt.
C. increasing public saving.
D. increasing transfer payments.
Answer: A
You might also like to view...
The MR=MC rule
A) applies to price-makers only. B) does not vary by market structure. C) is only true in competitive markets. D) applies to price-makers that have MR=P.
In Econland autonomous consumption equals 700, the marginal propensity to consume equals 0.80, net taxes are fixed at 50, planned investment is fixed at 100, government purchases are fixed at 100, and net exports are fixed at 40. Induced expenditure equals:
A. 0.20Y. B. 990 + 0.20Y. C. 900 + 0.80Y. D. 0.80Y.
To reduce the federal funds rate, the Fed can:
A. buy government bonds from the public. B. increase the discount rate. C. increase the prime interest rate. D. sell government bonds to commercial banks.
The number of seats available in an arena is fixed at 20,000. The equilibrium price for a ticket to a basketball game at the arena is $75. The equilibrium price for a ticket to the circus at the arena is $25. Which of the following is true?
A. The demand for each basketball game must be more than the demand for each circus performance. B. The demand for each circus performance must be greater than the demand for each basketball game. C. The supply of circus performances must be less elastic than the supply of basketball games. D. Basketball games must be more expensive to produce than a circus performance.