Which of the following is a macroeconomic question?
A) Why did a leading computer manufacturer establish call centers in India?
B) Should the government put a tax on alcohol in an attempt to assist in the funding of support groups like Alcoholics Anonymous?
C) Should we have a constitutional amendment requiring the government to implement a national consumption tax to replace the current income tax?
D) Why does a pharmaceutical manufacturer try to lower its production costs?
C
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The use of debt financing to purchase food, clothing, vacations, and other non-durable items
A) is prudent as long as you have an unused balance on your credit card. B) is imprudent because such purchases will mean that you will soon be making payments on items that have you have already consumed. C) is prudent as long as you plan to save more in the future. D) is imprudent unless you need to purchase these items to impress your friends.
What is moral hazard?
Fill in the blank(s) with the appropriate word(s).
Media reports often suggest that the increasing public debt is a burden on future generations. What they mean is that
A. it reduces the current level of investment. B. it reduces both nominal and real interest rates. C. it makes predicting future unemployment levels unpredictable. D. it causes deflation.
According to the equation of exchange, if real Gross Domestic Product (GDP) is $25 billion, the money supply is $10 billion, and the price index equals 2, then the income velocity of money is
A. 5. B. 10. C. 25. D. 50.