Suppose a country has a real growth rate of 3%. Government spending is 75 billion units of currency and its tax revenues are 60 billion units of currency. The current national debt is 300 billion units of currency. At what inflation rate will its debt-to-income ratio remain unchanged?
Government spending exceeds tax revenues by 15 billion units of currency, which will raise the debt from 300 to 315 billion units, which is a 5% increase. Since the real growth rate is 3%, an inflation rate of 2% will leave the debt-to-income ratio unchanged
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When the Federal Reserve lends reserves to commercial banks, this is an example of:
A. discount window lending. B. an open-market sale. C. a change in reserve requirements. D. an open-market purchase.
A quota is
A) a government-imposed restriction on the quantity of a specific good that can be imported into a country. B) a tariff imposed on goods that are dumped into the home country. C) a tariff imposed on goods that are subsidized by their domestic governments and exported to other countries. D) a tariff based on the value of the imported good.
Tallulah is a German citizen who works for Volkswagen located in Fresno, California. Tallulah's work contributes to:
A. German GDP, but not U.S. GDP. B. U.S. GNP, but not U.S. GDP. C. U.S. GDP, but not U.S. GNP. D. German GDP and U.S. GNP.
The more substitutes for a good, the more elastic its demand
Indicate whether the statement is true or false