Which of the following is a valid concern about federal budget deficits?
A. The welfare of future generations will be directly related to the per-capita size of the national debt that they inherit.
B. Growth of the national debt will eventually lead to the bankruptcy of the government.
C. When the debt comes due, future generations may be unable to pay it off.
D. If the increases in the national debt reduce private expenditures on capital formation, aggregate demand is reduced.
Answer: D
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Which statement is true regarding a market in equilibrium
a. There is a shortage of the good. b. There is a surplus of the good. c. Neither demanders or suppliers are satisfied. d. Both demanders and suppliers are satisfied.
The idea of time inconsistency explains procrastination by:
A. recognizing that we have several modes of decision making, and the less time we have to react, the worse the decision is. B. recognizing that our ability to remember long-term benefits when making decisions diminishes the closer the action becomes. C. recognizing that we have two modes of decision making, a "future-oriented" and a "present-oriented" self, who have conflicting objectives. D. recognizing that we never take long-term benefits into account.
Amanda is from Vermont and visiting California for the first time. At home, Amanda always goes jogging early in the morning because it's hottest in the early afternoon. Not knowing what to expect of the weather in California, she decides to go jogging in the early morning during her visit. This decision is an example of:
A. a heuristic. B. positive framing. C. loss aversion. D. status quo bias.
Suppose the banking system currently has $300 billion in reserves, the reserve requirement is 5 percent, and excess reserves are $30 billion. What is the level of loans?
a. $270 billion
b. $5,400 billion
c. $6,000 billion
d. $5,100 billion