The following are important problems associated with the public debt, except:
A. Payments of interest on the debt lead to greater income inequality
B. Interest payments on the debt tend to reduce economic incentives to work and invest
C. Government borrowing to finance the debt may lead to too much private investment
D. Payment of interest on the debt held by foreigners would send real resources abroad
C. Government borrowing to finance the debt may lead to too much private investment
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A market in which the money of one nation is exchanged for the money of another nation is a ________.
A. foreign exchange market B. resource market C. stock market D. bond market
Given the production function Y = A and fixed values for the saving rate and depreciation, if productivity is growing at an average rate of three percent, and the labor input grows at two percent, there is a unique growth rate of capital that is
sustainable. That is, if the growth rate of capital is either higher or lower than this steady-state value, then it must eventually change, even if nothing else in the economy changes. Calculate this steady-state growth rate of capital, and explain why it alone is a sustainable rate. [Hint: Use the fact that the growth rates of output and capital per worker are 43% higher than the growth rate of productivity.]
Wealth is the same as net worth.
Answer the following statement true (T) or false (F)
An example of a unilateral transfer is
A) a gift to a relative who lives abroad. B) a check received in payment for an import. C) gold payments to foreign companies. D) SDR payments to world creditors.