Many people assert that the national debt is not a problem because "we owe it to ourselves." Is this true?
This idea is only true in a limited sense. It is true that future generations will inherit the benefits of the debt along with the liabilities, but this does not mean that the people who pay taxes to service the debt are the same people who will receive interest payments from the debt. Additionally, part of the debt (the external debt) is held by foreigners, and dollars used to repay that part of the debt will only return to the United States indirectly.
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A decrease in the personal income tax rate ________ disposable income which ________ consumption
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases
If the Federal Reserve were to simultaneously sell government bonds in the open market and decrease the discount rate, the
a. money supply will increase. b. money supply will decline. c. money stock will stay the same. d. two tools will work in opposite directions and the effect on the money supply is uncertain.
You purchase a pizza oven that is expected to last 10 years for $15,000. How do you account for the economic cost of the oven?
A) Expense the oven, taking a write-off for the entire price in the first year. B) Amortize the cost over the 10 year life of the oven, resulting in a cost of $1,500 per year. C) Calculate the value of renting the oven to someone else and use that as your cost. D) The cost is the price of the oven minus any revenue made selling pizzas made in the oven.
A "war on drugs" is waged, and, as a result, a larger quantity of drugs flowing into the United States is seized and more drug traffickers are arrested. If demand for drugs is relatively elastic, one would expect the total expenditure on drugs to: a. decrease
b. increase. c. stay constant. d. There is not enough information available to make a determination.