Answer the next question using the following budget information for a hypothetical economy. Assume that all budget surpluses are used to pay down the public debt. Government SpendingTax RevenuesGDPYear 1$450$425$2,000Year 25004503,000Year 36005004,000Year 46406205,000Year 56805804,800Year 66006205,000As a percentage of GDP, the
A. budget deficit was 3.9% in year 4.
B. budget surplus was less than 1% in year 6.
C. public debt was 12.5% in year 1.
D. public debt was 3% in year 6.
Answer: B
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Prices of money market instruments undergo the least price fluctuations because of
A) the short terms to maturity for the securities. B) the heavy regulations in the industry. C) the price ceiling imposed by government regulators. D) the lack of competition in the market.
The bank reserve equation is the
A) assets and liabilities of the entire banking system. B) tally sheet for sources and uses of reserves. C) M1 multiplier. D) Federal Reserve's method of determining how many government securities to purchase.
If two goods are substitutes, a decrease in the price of one will result in an increase in demand for the other.
a. true b. false
Suppose that a male police officer earns more than a female administrative assistant, but they both have the same amount of education. The difference in wages:
A. can be attributable to the increased danger of being a police officer. B. must be due to discrimination against women among police departments. C. will disappear once the labor market has reached equilibrium. D. is a violation of anti-discrimination laws.