Which of the following statements is TRUE about the public debt and future generations?
A) Future generations will always be worse off because they will have to pay off the public debt.
B) Increased consumption today will lead to increases in the capital stock in the future.
C) Future generations may be better off if the rate of return on the borrowed funds is higher than the interest rate paid to foreign residents.
D) The public debt cannot be held by foreign residents therefore we really owe the debt to ourselves.
C
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The informal sector differs from the formal sector in that informal firms tend to
a. be larger b. be more capital intensive c. operate more apart from the usual laws and regulations d. produce goods and services not found elsewhere e. none of the above
Economists consider economic depreciation to be the ________ in market value from the use of the capital and measure this use in terms of ________ cost.
A) increase; marginal B) decrease; opportunity C) increase; opportunity D) decrease; marginal
Helen is a computer analyst earning $750,000 a year in New York and flies each winter weekend to Florida to bask in the sun. The price tag is $1,500 . Her cousin Fred is a nursery school teacher earning $35,000 a year in Chicago and spends his winter weekends going to avant-garde movie theaters. The price tag is $20 . Who gets the better deal? a. Helen gets the better deal because the marginal
utility of the Florida weekend is higher than the weekend of movies, regardless of the price tags. b. Helen gets the better deal because the ratio of marginal utility to price is higher than the ratio of marginal utility to price for a weekend of movies. c. Fred gets the better deal because the ratio of marginal utility to price is higher than the ratio of marginal utility to price for a Florida weekend. d. Using interpersonal comparisons of utility, it is clear that Fred gets the better deal because the difference in price overwhelms any difference in the marginal utility of aweekend of movies compared to a weekend in Florida. e. It is impossible to say who gets the better deal because we can't engage in interpersonal comparisons of utility.
A contestable market is
A. An imperfectly competitive situation that is subject to entry. B. An imperfectly competitive situation with high barriers to entry. C. A market with only one producer. D. A perfectly competitive market.