If the deficit is 0.08 times GDP, the existing debt-GDP ratio is 0.8, and the growth rate of nominal GDP is 0.05, then the change in the debt-GDP ratio is
A. +0.08.
B. 0.
C. -0.08.
D. +0.04.
Answer: D
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In a mixed economy,
A. all economies choose an identical mix of private and public involvement in the economy. B. the government is more important than the private sector in generating output. C. there is some government influence over the workings of the free market. D. All of the responses are correct.
If the price of grapefruit rises, the substitution effect due to the price change will cause
A) a decrease in the demand for oranges, a substitute for grapefruit. B) a decrease in the quantity of grapefruit demanded. C) a decrease in the quantity of grapefruit supplied. D) a decrease in the demand for grapefruit.
The AD, SRAS, and LRAS curves each show a relationship between which two economic variables?
A) The aggregate price level and output B) The aggregate price level and the interest rate C) Output and unemployment D) Output and the interest rate
If good B is a complement to good A, then a rise in the price of B
a. increases the quantity demanded of A b. decreases the demand for A c. increases the demand for A d. decreases the quantity demanded of A e. will cause the demand for B to increase