National debt can be defined as:
a. the total money supply in the economy.
b. the total stock of government bonds outstanding.
c. the difference between real GDP and potential GDP.
d. the change in fiscal deficit that results from an increase in government spending.
e. the total volume of private investment in the country.
b
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Why do we need methods of allocating scarce resources?
What will be an ideal response?
A central tenet of the position against policy activism is that
A) consumption spending is highly unstable. B) consumption spending is highly stable. C) aggregate policies have little effect on consumption. D) instability in private consumption will always be offset by variations in other elements of private spending.
We limit ourselves to two periods in the intertemporal model of the business cycle because
A) we need to concentrate on the two phases of the business cycle. B) we can assume that people can live two periods of, say, 30 years. C) this is all we need to emphasize the intertemporal trade-off. D) we need an even number of periods.
Refer to Figure 6.3. If the market is in equilibrium, the producer surplus is:
A. area ABC. B. area BCD. C. zero. D. area ACD.