With inflation of 5 percent, real GDP growth of 3 percent, and an outstanding national debt of $3400 billion, the "allowable deficit" that holds the debt-GDP ratio constant is
A) $272 billion.
B) $68 billion.
C) $170 billion.
D) $175.1 billion.
E) $510 billion.
A
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Assume that a college student purchases only Ramen noodles and textbooks. If Ramen noodles are an inferior good and textbooks are a normal good, then the substitution effect associated with a decrease in the price of Ramen noodles, by itself, will result in
a. a decrease in the consumption of textbooks and a decrease in the consumption of Ramen noodles. b. a decrease in the consumption of textbooks and an increase in the consumption of Ramen noodles. c. an increase in the consumption of textbooks and an increase in the consumption of Ramen noodles. d. an increase in the consumption of textbooks and a decrease in the consumption of Ramen noodles.
If Italy can produce grapes at a lower opportunity cost than any other nation, Italy is said to have a(n) ________ in the production of grapes
A) comparative disadvantage B) autarky C) comparative advantage D) absolute advantage
Perfect competition has all of the following features except
a. large number of firms b. goods that are perfect substitutes c. no barriers to entry d. brand loyalty e. firm has insignificant market share
If people care about relative consumption rather than absolute consumption, then:
A. there is little need for government intervention in markets. B. their choices will lead to an efficient allocation of resources. C. their behavior will be consistent with traditional economic models. D. individuals' decisions need not lead to socially optimal outcomes.