Internationalization of the debt refers to a situation in which the deficit is financed by foreigners:
A. buying the debt, so that crowding out is increased.
B. selling the debt, so that crowding out is increased.
C. buying the debt, so that crowding out is avoided.
D. selling the debt, so that crowding out is avoided.
Answer: C
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Looking at real and nominal interest rates in the United States since 1971, we see that the
A) nominal interest rate has at times been negative. B) real interest rate has been greater than 10 percent for most years. C) real interest rate has at times been negative. D) real interest rate was above 5 percent during the low inflation of the 1970s. E) real interest is generally greater than the nominal interest rate.
In a competitive market with high cost and low cost consumers (where firms are unable to tell consumer types apart), any screening costs incurred by firms will be passed on to low cost consumer but not to high cost consumers.
Answer the following statement true (T) or false (F)
When a Pigouvian subsidy is imposed on a market with a positive externality efficiency:
A. is not affected. B. decreases. C. increases. D. drops to zero.
Discretionary fiscal policy is best defined as:
a. the deliberate change in tax laws and government spending to change equilibrium income. b. the deliberate manipulation of the money supply to expand the economy. c. the arbitrary fluctuation in tax laws and budget requirements. d. the automatic change in certain fiscal instruments when real GDP changes. e. the policy action taken by the Congress to reduce the federal budget deficit.