Suppose that a country has an inflation rate of about 3 percent per year and a real GDP growth rate of about 3 percent per year. How large of a deficit can the government run (as a percentage of GDP) without raising the debt-to-income ratio?


The government could run a deficit of about 6 percent of GDP without increasing the debt-to-income ratio.

Economics

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Options on futures contracts are referred to as

A) stock options. B) futures options. C) American options. D) individual options.

Economics

A change in the dollar value of the British pound from $1.60 to $1.50 represents

A) an increase in the pound price of British goods. B) an appreciation of the dollar relative to the pound. C) an appreciation of the pound relative to the dollar. D) an increase in the dollar price of British goods.

Economics

In a market economy,

a. households decide which firms to work for and what to buy with their incomes. b. firms decide whom to hire and what to make. c. a central planner makes decisions about production and consumption. d. Both a and b are correct.

Economics

Refer to the information provided in Table 24.7 below to answer the question(s) that follow. Table 24.7All Numbers are in $ MillionRefer to Table 24.7. The equilibrium level of aggregate income is $________ million.

A. 1,200 B. 1,300 C. 1,500 D. 1,400

Economics