Which of the following is an important real consequence of the public debt of the United States?
A. It will threaten to bankrupt the Federal government
B. It discourages saving among the general public
C. It decreases the inequality in the distribution of income in the U.S.
D. Its consequent higher interest rates lead to fewer incentives to bear risk and innovate
D. Its consequent higher interest rates lead to fewer incentives to bear risk and innovate
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Intermediate goods are goods and services used:
a. by the ultimate user. b. by state and local governments. c. as inputs. d. both as inputs and final goods.
When Maxwell Fruit Drinks increases the number of workers it employs from 20 to 25, its total labor costs rise from $10,000 to $15,000 a week. We know then that
a. Maxwell should never have hired the last five workers b. Maxwell should continue hiring workers c. diminishing returns have set in d. the marginal revenue product curve is decreasing e. the marginal labor cost is $1,000
Why can't private individuals always internalize an externality without the help of government?
a. Legal restrictions prevent side payments between individuals. b. Transactions costs may be too high. c. Side payments between individuals are inefficient. d. Side payments between individuals are insufficient.
Economies of scale
A. do not arise in oligopolistic industries. B. can exist but fail to create barriers to entry in oligopolistic industries. C. can exist but are rare in oligopolistic industries. D. are commonplace and often a barrier to entry in oligopolistic industries.