While the budget deficit represents a ________, the public debt represents a ________
A) flow; flow B) stock; flow C) flow; stock D) stock; stock
C
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In the figure above, a decrease in the price of a bag of potato chips would result in the budget line
A) making a parallel shift toward point a. B) making a parallel shift toward point c. C) becoming flatter. D) becoming steeper.
Activities that go unreported to the government in order to avoid paying taxes or because the activity is illegal are known collectively as the
a. non-profit sector b. federal sector c. illegal economy d. special-interest category e. underground economy
Transfer earnings of a factor is equal to its:
a. economic rent. b. explicit cost. c. actual earnings. d. overhead cost. e. opportunity cost.
Consider someone who borrows $10,000 to buy a car at a fixed interest rate of 9%. If inflation is 3% at the time the loan is made, what is the real interest rate at which the loan must be repaid, and to what level would the interest rate have to rise for the real interest rate on the loan to be zero?
a. 4.5%; 7.5% b. 6; 9% c. 8%; 10% d. 6; 12%