One of the potential consequences of the public debt is that it may:
A. Make income distribution more equitable
B. Increase the debt burden of foreign creditors
C. Lead to additional future taxes that reduce economic incentives
D. Decrease interest rates and increase investment spending
C. Lead to additional future taxes that reduce economic incentives
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Suppose x is an inferior good. Then we will overestimate the deadweight loss from taxes on consumption good x if we use the uncompensated demand curve rather than the marginal willingness to pay (or compensated demand) curve.
Answer the following statement true (T) or false (F)
Why do governments want to maintain the health of the banking system?
What will be an ideal response?
In the coordination failure model, the most likely explanation of business cycles are
A) money supply shocks. B) government spending shocks. C) total factor productivity shocks. D) fluctuations between "good" and "bad" equilibria.
A put option is a contract
A) that gives the owner the right, but not the obligation, to buy shares of a stock at a specified price within the time limits of the contract. B) that gives the owner the right, but not the obligation, to sell shares of a stock at a specified price within the time limits of the contract. C) in which the seller agrees to provide a particular good to the buyer on a specified future date at an agreed-upon price. D) that gives the owner the right, but not the obligation, to buy or sell shares of a stock at a specified price within the time limits of the contract.