At the end of 2012, the government had a debt of about $11.3 trillion. If during 2013 real GDP rose 2% and inflation was 2.2%, what is the largest deficit the government could have run without raising the debt-to-GDP ratio?
a. about $226.0 billion
b. about $248.6 billion
c. about $474.6 billion
d. about $561.8 billion
c
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The short-run Phillips curve is
A) U-shaped. B) vertical at the natural unemployment rate. C) upward sloping. D) downward sloping. E) horizontal at the expected inflation rate.
Rent-seeking activities are socially wasteful because they use scarce resources but do not add to society's output
a. True b. False
When demand is unit elastic, an increase in price will result in an increase in total revenue.
Answer the following statement true (T) or false (F)
The LM curve illustrates that when income increases, the
A. real interest rate on nonmonetary assets must increase to clear the goods market. B. price level must increase to clear the goods market. C. real interest rate on nonmonetary assets must increase to clear the asset market. D. price level must increase to clear the asset market.