Suppose the government borrows to purchase military ammunition which is immediately used up in target practice. The rate of return on this investment is ________, and in this case the government debt ________ a burden on future taxpayers
A) r, is not
B) r, is
C) 0, is not
D) -r, is not
E) -r, is
E
You might also like to view...
Following the 2007-2009 financial crisis, many people feared that Greece might leave the euro and resume using the drachma. If that happened, the drachma might be worth less than the euro
When using fiat money like the drachma, the key to acceptance is that households and firms have confidence that if they accept drachma in exchange for goods and services, the drachma will not lose much value during the time they hold them. If sellers were not willing to accept the drachma in exchange for goods and services, the drachma would not serve as A) a medium of exchange. B) fiat money. C) legal tender. D) a unit of account.
Which of the following is the best statement about how the amount of the net public debt that a typical individual owes to the holders of the debt has varied in the recent past?
A) The amount has not varied much over time. B) The amount has varied a lot over time. C) The amount has steadily increased over time. D) The amount has steadily decreased over time.
Why does the Fed have to be concerned with money growth even though their main focus seems to be on interest rates?
What will be an ideal response?
If the economy is to have automatic stabilizers, when real GDP rises:
A. tax revenues should rise. B. government spending should not change. C. government spending should rise. D. tax revenues should fall.