Which of the following is a reason why we should consider the federal national debt a problem?
A) The federal government is in danger of defaulting on its debt.
B) If the debt drives up interest rates, crowding out will occur.
C) If the debt was incurred to finance improvements in infrastructure, crowding out will occur.
D) If the debt was incurred to finance research and development, crowding out will occur.
Answer: B
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An inframarginal externality is where_____
a. there are spillover benefits and costs, both in total and on the margin. b. there are spillover benefits and costs, but only in total. c. there are no spillover benefits, but there are marginal costs d. there are spillover benefits and costs, but they relate only to infrared technology
What is the opportunity cost of going from point C to point D?
Suppose that one-year Treasury bills yield 5 percent in the United States and 6 percent in France. Investors will prefer the U.S. securities if they expect the dollar to __________ against the euro over the next year
A) depreciate by less than 1 percent B) depreciate by more than 1 percent C) appreciate by less than 1 percent D) appreciate by more than 1 percent
If individuals save less because inflation lowers returns on savings, this should ________ real interest rates and ________ investment expenditures
A) raise; increase B) raise; reduce C) lower; increase D) lower; reduce