Internal government debt is:
A.more like an individual's debt because paying interest on it involves a net reduction in domestic income.
B. more like an individual's debt because paying interest on it involves no net reduction in domestic income.
C. less like an individual's debt because paying interest on it involves a net reduction in domestic income.
D. less like an individual's debt because paying interest on it involves no net reduction in domestic income.
Answer: D. less like an individual's debt because paying interest on it involves no net reduction in domestic income.
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Suppose Russia exports sunflower seeds to Ireland and imports coffee from Brazil. This situation suggests
a. Russia has a comparative advantage over Brazil in producing coffee, and Ireland has a comparative advantage over Russia in producing sunflower seeds. b. Russia has a comparative advantage over Ireland in producing sunflower seeds, and Brazil has a comparative advantage over Russia in producing coffee. c. Russia has an absolute advantage over Ireland in producing sunflower seeds, and Brazil has an absolute advantage over Russia in producing coffee. d. Russia has an absolute advantage over Brazil in producing coffee, and Ireland has an absolute advantage over Russia in producing sunflower seeds.
The marginal rate of substitution is the
A) rate at which the consumer can exchange one good for the other.
B) change in the quantity of one good that just offsets a one-unit change in the consumption of another good such that the total satisfaction remains constant.
C) change in the quantity of one good that changes the utility received by one unit.
D) same thing as the marginal utility of a good.
When interest rates increase, the substitution effect suggests that individuals will
A. consume less today. B. save less today. C. save more and consume more today. D. consume less in the future.
Which of the following questions can be answered using the concepts of macroeconomics?
A) What is the effect of an increase in price on the supply of a good? B) Why do some firms produce differentiated goods? C) What is the difference between a public good and a private good? D) Why does the rate of economic growth fluctuate from year to year?