Suppose the government's initial debt is $425 billion. If for the next three years the government runs deficits of $150, $125, and $200 billion, the government's total debt at the end of the three years will be
A) -$50 billion. B) $50 billion. C) $475 billion. D) $900 billion.
D
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What answers are required before the notions of horizontal and vertical equity become meaningful?
What will be an ideal response?
Consumers increased consumption by a relatively small amount in 2008 and 2009 because they believed the tax cuts were temporary
a. True b. False Indicate whether the statement is true or false
Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and real GDP in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period falls, and real GDP falls. b. The quantity of real loanable funds per time period rises, and real GDP rises. c. The quantity of real loanable funds per time period rises, and real GDP remains the same. d. The quantity of real loanable funds per time period and real GDP remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
Which one of the following is NOT a government failure?
A. The "bridge to nowhere" in Alaska B. The FEMA reaction to Hurricane Katrina C. Allowing federal budget deficits to be financed by foreigners while calling for further tax cuts to help incumbent politicians get reelected D. Water pollution