Which of the following statements about the public debt is? true?
A) It is equal to the budget deficit.
B) It decreases when the government runs a budget deficit.
C) It is a stock variable.
D) all of the above
Answer: C) It is a stock variable.
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Answer the following statement(s) true (T) or false (F)
1. When formulating an economic model, one must explicitly identify both an agent's objectives and his constraints. 2. Costs are forgone opportunities. 3. The first step in economic analysis is to choose an appropriate equilibrium condition. 4. An economic problem can be defined as any problem involving money. 5. Economists focus only on real world consumer choices.
George Gnat subscribes to a monthly pest control service for his home
Last week the owner of the service informed George that he will have to raise his monthly service fee because of increases in the price of gasoline used by his workers on their service trips. How is the market for pest control services affected by this? A) There is a decrease in the demand for pest control services. B) There is a decrease in the supply of pest control services. C) There is a decrease in the quantity of pest control services supplied. D) There is an increase in the supply of pest control services.
Because leisure is a normal good, an increase in the wage rate will result in
A) an increase in the quantity of labor supplied because of the substitution effect. At low wages the income effect causes an increase in the quantity of labor supplied, but at high wages the income effect causes a decrease in the quantity of labor supplied as the wage rises. B) an increase in the quantity of labor supplied because of both the substitution effect and the income effect. C) a decrease in the quantity of labor supplied because of the substitution effect and an increase in the quantity of labor supplied because of the income effect. D) an increase in the quantity of labor supplied because of the substitution effect and a decrease in the quantity of labor supplied because of the income effect.
If the exchange rate value of the dollar depreciates relative to other currencies, we would expect
a. U.S. exports to decrease. b. U.S. exports to increase. c. U.S. imports to increase. d. aggregate demand in the United States to decrease.