A public debt which is owed to foreigners can be burdensome because:
A. Foreign interest rates are persistently higher than domestic interest rates
B. The payment of interest reduces the volume of goods and services available for domestic uses
C. The payment of interest will conflict with a nation's foreign aid programs
D. The payment of interest will necessarily have a deflationary effect on prices in the paying nation
B. The payment of interest reduces the volume of goods and services available for domestic uses
You might also like to view...
Suppose that the total production of an economy consists of 10 oranges and 5 candy bars, each orange sells for $0.20, and each candy bar sells for $1.00. Which expression of the output of this economy is most consistent with the concept of GDP?
A. This economy produces two-thirds oranges and one-third candy bars. B. This economy produces food valued at $1.20. C. This economy produces $7.00 worth of food. D. This economy produces 15 food items.
Suevania opens its doors to trade with Barvania. Barvania has a comparative advantage in the production of machinery. Hence, once trade occurs Suevania's consumers will buy ________ machinery and pay ________ before
A) more; a lower price than B) the same amount of; the same price as C) less; a higher price than D) more; a higher price than E) less; a lower price than
In the arena of trade policy, the battle often seems to be between ________ laws that increase protectionism and ________ agreements that try to reduce protectionism.
a. national; national b. international; international c. national; international d. international; national
If at the prevailing interest rate the quantity of money demanded is $2 trillion, and the supply of money is $1.5 trillion, then which of the following is true?
A. There is a shortage of money, and consequently interest rates must fall in order to achieve an equilibrium in the money market. B. There is a surplus of money, and consequently interest rates must fall in order to achieve an equilibrium in the money market. C. There is shortage of money, and consequently interest rates must rise in order to achieve an equilibrium in the money market. D. There is a surplus of money, and consequently interest rates must rise in order to achieve an equilibrium in the money market.