In 2012, the U.S. federal debt held by the public was:
A. held largely by foreign governments.
B. about four times as large as the GDP.
C. about twice as large as the GDP.
D. about 70 percent of the size of the GDP.
D. about 70 percent of the size of the GDP.
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Suppose you go out with your friend for coffee and donuts at the local donut store. The first donut you eat tastes incredibly good. The second one also tastes pretty good. The third donut seems just okay. With the fourth donut you are turning somewhat green. The fifth donut makes you sick. Your friend, an economist, describes your experience as the principle of:
a. utility maximization. b. irrationality in consumer behavior. c. instant gratification. d. differing tastes and preferences. e. diminishing marginal utility.
If the marginal propensity to consume is 0.5, what is the value of the expenditure multiplier?
a. 1.0 b. 1.5 c. 2.0 d. 0.5 e. 10.0
Chloe's Café sells gourmet cinnamon rolls. In the long run, the café incurs a total cost of $500 to produce 1,000 cinnamon rolls. If Chloe's Café exhibits constant returns to scale between 1,000 and 1,500 cinnamon rolls, the long-run average total cost for 1,250 cinnamon rolls is a. higher than $0.50. b. lower than $0.50. c. equal to $0.50
d. equal to $500.
Which of the following policies would be most likely to reduce the rate of inflation?
A. sale of government bonds by the Federal Reserve B. a reduction in the discount rate C. an increase in the size of the federal budget deficit D. a reduction in the required reserves imposed on the banking system