Expressing the U.S. federal budget deficit as a percentage of Gross Domestic Product (GDP)
A. is only useful if the budget deficit is rising at an annual rate of more than 4 percent.
B. helps us understand the size of the deficit relative to the size of the economy.
C. was useful through the 1980s, but is no longer helpful because both the deficit and real Gross Domestic Product (GDP) have grown so large.
D. results in inflation-adjusted revenue and expenditure numbers.
Answer: B
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The nation of Hyperbole is in a recession, and the government decides to increase taxes and reduce government spending to reduce the growing deficit. This will ________ aggregate demand and will likely ________ real GDP and employment
A) decrease; decrease B) decrease; increase C) increase; decrease D) increase; increase
A dividend is
a. a payment to the corporation's bondholders b. the same as the profit of the corporation c. a payment of a portion of the corporation's profits to the shareholders d. guaranteed if one has common stock e. the payment to each partner in a partnership form of business
Keynes once remarked that, in the long run, we're all dead. He was responding to the conventional wisdom of classical economics, which argued that
a. the aggregate supply curve is vertical in the long run b. the aggregate supply curve is horizontal in the long run c. an economy out of equilibrium was only a short-run, temporary departure from full-employment equilibrium d. we must save for the future e. consumption will run out in the long run
A good is nonrival in consumption if it is not practical to exclude people who don't pay for it from enjoying its benefits.
Answer the following statement true (T) or false (F)