A measure of the burden of continual deficit financing over time is the ratio of
A. The deficit to the debt.
B. The deficit to the GDP.
C. Tax revenues to the debt.
D. The debt to the GDP.
Answer: D
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Loans by the Federal Reserve to banks are known as
A) repurchase agreements. B) Federal funds. C) discount loans. D) cash items in the process of collection.
According to the law of demand, if the price of a netbook decreases, ceteris paribus, the demand for netbooks would increase
a. True b. False Indicate whether the statement is true or false
Suppose the price of gas increases by 20%. Will demand be more elastic if consumers have 3 weeks or 3 years to adjust to this price change?
In the view of rational expectations theory:
A. People make economic forecasts that are based on insider-outsider relationships and self-fulfilling prophecies B. People form beliefs about future economic outcomes that accurately reflect the likelihood that those outcomes will occur C. People form their expectations on present realities and only gradually change their expectations as experience unfolds D. The economy does not respond quickly to changes in prices, which causes a mis-allocation of economic resources