When the government runs a budget deficit,
a. interest rates are lower than they would be if the budget were balanced.
b. national saving is higher than it would be if the budget were balanced.
c. investment is lower than it would be if the budget were balanced.
d. All of the above are correct.
c
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If 50 percent of the population in a country is employed and average labor productivity equals $30,000, then real GDP per person equals:
A. $50,000. B. $30,000. C. $15,000. D. $60,000.
Entry and exit continue in monopolistic competition until the remaining firms are
A) earning an economic profit. B) incurring an economic loss. C) earning less than a normal profit. D) earning zero economic profit. E) producing the normal amount of product differentiation.
Identify the error in judgment in each of the following statements: I. "If you leave a concert during the encore, you will avoid traffic and get home more rapidly; therefore everyone should leave during the encore." II. "Whenever I wear my lucky baseball cap to an exam, I receive an "A." My baseball cap must induce the teacher to give me good grades."
Refer to the table. If an additional lump-sum tax of $20 were imposed, we would expect:
Answer the question on the basis of the following table:
A. equilibrium GDP to fall by $30.
B. equilibrium GDP to fall by $20.
C. equilibrium GDP to fall by $50.
D. equilibrium GDP to rise by $24.