Governments, like individuals, businesses, and entire economies face resource and spending limits. Over the very long run, the limits mean that
A) spending must be paid for by income or revenue and not by more debt
B) spending now must be paid for by income or revenue now
C) the debt to gdp ratio must be zero
D) spending must eventually decrease if running a budget deficit
Answer: A) spending must be paid for by income or revenue and not by more debt
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A payment that a person receives from the government for engaging in a particular activity is called a
A) bribe. B) subsidy. C) consumer surplus. D) tariff.
An attempt by a central bank to alter the money supply by buying or selling domestic assets
A) will leave both domestic money supply and foreign reserves unchanged. B) will cause an offsetting change in aggregate demand. C) will lead to a rise in domestic employment and output. D) will lead to a decrease in domestic employment and output. E) will cause an offsetting change in foreign reserves and leave the domestic money supply unchanged.
Which of the following is true?
a. Most stockholders own stock because they want to run the business. b. The shareholders of a large well-established firm can be reasonably sure that they will earn a real rate of return of about 7 percent in the future. c. Ownership of a corporate bond provides the bondholder with an ownership right to a fraction of the firm's future profits. d. Stock ownership makes it possible for investors to own a fractional share of a firm's future profits even if they do not participate in the operation of the firm.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point E to Point A, the opportunity cost of hybrid cars, measured in terms of motorcycles
A. increases. B. initially increases, then decreases. C. decreases. D. remains constant.