The national debt
a. exists because of past government budget deficits.
b. is the difference between the government's spending and revenue in a given year.
c. is the amount households owe on credit cards, mortgages and other loans.
d. is the amount household and firms have borrowed minus the amount they have saved.
a
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Suppose a paper mill earns $1,000,000 in profits when it pollutes a river, and it can abate pollution at a cost of $A. The effects of the pollution are confined to a single farmer who earns $400,000 if the water he uses from the river is clean and $300,000 if it's polluted. What is the combined profit of both firms without abatement?
A. $1,300,000 B. $900,000 C. $700,000 D. $1,400,000
If the market price is at equilibrium, the deadweight loss is zero
Indicate whether the statement is true or false
Which of the following would be part of the nation's current account?
A) An old house purchased by an American in Italy B) The purchase of a U.S. Treasury bond by a foreigner C) The interest an American earns on a British bond D) A factory built by the Japanese in the United States
Consider the above figure. At an income of $60 we would expect saving to be equal to
A) $60. B) $40. C) $10. D) $0.