Deficits and debt are often measured relative to GDP because:
A. the growth in GDP depends on the debt.
B. the government's ability to repay the debt depends on GDP.
C. this method always makes them appear smaller.
D. this method always makes them appear larger.
Answer: B
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Which of the following hypotheses is a plausible explanation for why U.S. households save so little?
A. Government assistance to low-income U.S. households has increased the demonstration effects on spending by the poor. B. Most American already own homes and, therefore, have less need for life-cycle saving. C. The highly developed financial markets in the U.S. have reduced the need for precautionary saving by Americans. D. Government assistance to the elderly has reduced the need for life-cycling saving.
Use the following graph to answer the next question.
At the profit-maximizing level of output, the profit earned by the perfectly competitive firm is given by the area
A. BCFG. B. 0AHE. C. ABGH. D. ACFH.
Mr. Smith put his laptop up for sale. He is aware of the fact that the laptop malfunctions frequently
However, none of the potential customers who came to buy the laptop were able to discover the problem and one of them actually bought it at a remunerative price. This occurred due to ________. A) the presence of asymmetric information B) the presence of positive externalities C) the presence of negative externalities D) the selective retention of information by sellers
Figure 7-5
Which of the graphs in Figure 7-5 could be a firm’s total fixed cost curve?
A. (a) B. (b) C. (c) D. (d)