In what way is government debt like individual debt?
A. Inflation reduces the real value of both types of debt.
B. Government never has to pay back its debt.
C. Government can pay its debt by printing money.
D. Much of government debt is owed to its own citizens.
Answer: A
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Assuming the economy is represented by the graph shown, if the government were to enact a partially successful expansionary fiscal policy, it would be most likely to:
A. move from equilibrium A to B.
B. move from equilibrium B to A.
C. cause unemployment to temporarily increase.
D. cause deflation.
If some nonprice level determinant causes total spending to decrease, then the effect on aggregate demand will be a: a. movement upward along the curve
b. movement downward along the curve. c. shift to the left. d. shift to the right.
When businesses are cutting back production, then it probably true that
a. total spending is greater than total output. b. total output is greater than total income. c. total spending is less than total output. d. inventory levels are decreasing.
Which of the following generates demand for foreign currencies?
A. The building of plants by foreign corporations in the United States. B. Exports from the United States to foreign countries. C. Foreign tourists traveling to the United States. D. Imports of foreign goods by firms located in the United States.