As the federal budget deficit increases,
A. federal borrowing is likely to decrease.
B. increased interest obligations become more likely.
C. tax cuts become more likely.
D. all of the options are correct.
Answer: B
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Use the following graph, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product to answer the next question.
Sd + Q is the product supply curve after an import quota is imposed. A quota of y?w will result in quota rent equal to areas
A. F + J. B. E + F + G + H + J. C. F + G + H + J. D. G + H.
The profitability of an investment project will increase if
A. tax rates increase. B. real interest rates increase. C. real interest rates decrease. D. business tax deductions decrease.
What is productivity?
What will be an ideal response?
An increase in the budget deficit
a. reduces net capital outflow and domestic investment. b. reduces net capital outflow and raises domestic investment. c. raises net capital outflow and domestic investment d. raises net capital outflow and reduces domestic investment.