Under which of the following circumstances should we be concerned about a rising national debt?
a. When it rises at a slower pace than GDP.
b. When the government runs deficits over a long period of time, such as a decade.
c. When it rises at a faster pace than GDP.
d. When the government does not run enough surpluses to counteract prior deficits.
e. When it rises at a slower pace than the money supply.
C
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Mexico and the members of OPEC produce crude oil. Realizing that it would be in their best interests to form an agreement on production goals, a meeting is arranged and an informal, verbal agreement is reached. If both Mexico and OPEC abide by the agreement, then OPEC's profit will be $200 million and Mexico's profit will be $100 million. If both Mexico and OPEC cheat on the agreement, then OPEC's profit will be $175 million and Mexico's profit will be $80 million. If only OPEC cheats, then OPEC's profit will be $185 million, and Mexico's profit will be $60 million. If only Mexico cheats, then Mexico's profit will be $110 million, and OPEC's profit will be $150 million. You may find it helpful to fill in the payoff matrix below. src="https://sciemce.com/media/4/ppg__rrr0818190951__f1q386g1.jpg" alt="" style="vertical-align: 0.0px;" height="203" width="377" />Suppose Mexico chooses first, and then OPEC, after seeing Mexico's choice, chooses second. Before Mexico chooses, OPEC tells Mexico that if Mexico cheats on the agreement, then OPEC will also cheat, and if Mexico abides by the agreement, then OPEC will also abide. This is an example of a ________, and the outcome is that ________.
A. credible threat; neither will cheat
B. commitment problem; neither will cheat
C. non-credible threat; both will cheat
D. prisoner's dilemma; both will cheat
Use the above table. If the marginal revenue product is $30, how many workers will the profit maximizing monopsonist hire and what wage will they pay each worker?
A) 1; $10 B) 2; $15 C) 3; $20 D) 4; $25
If at the prevailing interest rate the quantity of money demanded is $2 trillion, and the supply of money is $1.5 trillion, then which of the following istrue?
a. There is a shortage of money, and consequently interest rates must fall in order to achieve an equilibrium in the money market. b. There is a surplus of money, and consequently interest rates must fall in order to achieve an equilibrium in the money market. c. There is shortage of money, and consequently interest rates must rise in order to achieve an equilibrium in the money market. d. There is a surplus of money, and consequently interest rates must rise in order to achieve an equilibrium in the money market.
What is the difference between real and nominal GDP? If the president of the United States (or your instructor) asked you to evaluate the economy over the past five years, which one would you use and why?