What is the difference between the federal budget deficit and the national debt?
a. The budget deficit is the amount by which expenditures exceed revenues in a particular year, while the national debt is the cumulative effect of all past budget deficits and surpluses.
b. The budget deficit is the cumulative effect of all prior national debts.
c. The national debt includes all outstanding bonds, while the budget deficit excludes bonds held by government agencies.
d. This is a trick question because there is no difference between the budget deficit and the national debt.
a. The budget deficit is the amount by which expenditures exceed revenues in a particular year, while the national debt is the cumulative effect of all past budget deficits and surpluses.
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The prisoners' dilemma is an example of a(n) ________ game
A) simultaneous move B) extensive-form C) zero-sum D) mixed strategy
You explain to your friend Haslina, who runs a catering service called "Meals in a Zip," about an economic theory which asserts that consumers will purchase less of a product at higher prices than they will at lower prices
She contends that the theory is incorrect because over the past two years she has raised the price of her catered meals and yet has seen a brisk increase in sales. How would you respond to Haslina? A) Haslina is making the mistake of assuming that correlation implies causation. B) I will explain to her that there are some omitted variables that have contributed to an increase in her sales such as changes in income. C) I will explain to her that she is making the error of reverse causality: it is the increase in demand that has enabled her to raise her prices. D) Haslina is right; she has evidence to back her claim. The theory must be erroneous.
The case of production with a single variable input is analogous to
A. changing the use of land, labor, and capital in production by a constant absolute amount. B. a controlled laboratory experiment in which the scientist permits one variable to change at a time. C. changing the use of land, labor, and capital in production by a constant percentage. D. specialization in one particular product by a company.
If a business firm is not operating at the point where MR = MC, then:
a. it should shut down. b. it will incur losses. c. it cannot be earning a profit. d. its profit is zero. e. it is not earning the maximum potential profit.