Are we passing the national debt burden on to our children?
What will be an ideal response?
One side of this argument is that the debt is mostly internal, so financing the debt only involves exchanging old bonds for new bonds among U.S. citizens. The burden of the debt falls only on the current generation when the trade-off between public-sector goods and private-sector goods along the production possibilities curve occurs. The counter-argument is that there is a sizable external debt that transfers purchasing power to foreigners.
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Refer to the figure above. When the demand curve for gas is D2 and the supply curve for gas is S, the surplus in the market when price is $8 is:
A) 20 gallons. B) 55 gallons. C) 25 gallons. D) 50 gallons.
In order to benefit from diversification, the returns on assets in a portfolio must:
A. be perfectly negatively correlated. B. have the same idiosyncratic risks. C. be perfectly positively correlated. D. positively correlated but not perfectly.
As it relates to the political process, the principal-agent problem results from the:
A. negative externalities that are created by some policy actions. B. political rules that encourage elected officials to engage in unethical and illegal behavior. C. inconsistency between voters' interest in programs and politicians' interest in reelection. D. paradox of voting.
If, in a competitive market, marginal benefit is greater than marginal cost
A) the net benefit to consumers from participating in the market is greater than the net benefit to producers. B) the government must force producers to lower price in order to achieve economic efficiency. C) the quantity sold is greater than the equilibrium quantity. D) the quantity sold is less than the equilibrium quantity.