What is the common method of financing a budget deficit?
The budget deficit is financed usually by issuing debt. The federal government in effect borrows an amount necessary to cover the deficit by issuing bonds, or IOUs, payable typically at some maturity date. The total of the values of all bonds outstanding constitutes the federal debt.
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John's utility from an additional dollar increases more when he has $1,000 than when he has $10,000. From this, we can conclude that John
A) is risk averse. B) is risk loving. C) is risk neutral. D) has a negative marginal utility of wealth.
Perfectly competitive firms and monopolists are different because
a. in perfect competition MC = P, while a monopolist produces where P > MC. b. in perfect competition MC = P, while a monopolist produces where MC > P. c. in perfect competition P > MC, while a monopolist produces where MC = P. d. in perfect competition MC > P, while a monopolist produces where MC = P.
Karl can produce either 10 tons of oranges or 5 tons of apples in a year, while Adam can produce either 5 tons of oranges or 10 tons of apples. Which of the following is true? a. Mutually beneficial trade between Karl and Adam could take place at an exchange rate of 1 ton of apples to 1 1/2 ton of oranges. b. Mutually beneficial trade between Karl and Adam could take place at an exchange rate
of 1 ton of oranges to 1 1/2 ton of apples. c. both a. and b. are true. d. neither a. nor b. are true.
If the United States has a lower opportunity cost than Mexico in the production of wheat, then it will import wheat from Mexico.
a. true b. false