The federal government debt ________ when the federal government runs a deficit and ________ when the federal government runs a surplus
A) increases; increases
B) decreases; decreases
C) increases; decreases
D) decreases; increases
C
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Use two or three of the things we "know" about economic development to comment on the state of our knowledge
What will be an ideal response?
Suppose two goods (x and y) are being produced efficiently and that the production of x is always more labor intensive than the production of y. Production depends only on two factors (capital and labor); these may be smoothly substituted for each other. The total quantities of these inputs are fixed. An increase in the production of x and a decrease in the production of y will:
a. increase the capital-labor ratio in each firm. b. decrease the capital-labor ratio in each firm. c. leave the capital-labor ratio for each firm unchanged. d. increase the capital-labor ratio in y production and decrease the capital-labor ratio in x production.
An increase in government spending causes:
a. Aggregate supply to rise, which reduces the nation's average price level and increases real GDP. b. Aggregate demand to rise, which increases the nation's average price level and reduces real GDP. c. Always causes the passive deficit to rise. d. Aggregate supply to rise, which reduces the nation's average price level and reduces real GDP. e. Aggregate demand to rise, which increases the nation's average price level and increases real GDP.
Ceteris paribus, for a farmer, corn and wheat are
A. Complements in production; by-products. B. Substitutes in production. C. Unrelated in a farmer's decision. D. None of the choices are correct.