When will the difference between the actual deficit and the structural deficit be the largest?
A. In an inflationary gap
B. At full employment
C. At potential real GDP
D. In a recession
Answer: D
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Although Africa's debt/GNP ratio is larger than Latin America's, the debt-service burden is lighter. Explain this and relate it to changes in the nature of development lending in the 1970s
What will be an ideal response?
Which of the following would be considered tax evasion?
a. deducting charitable contributions when figuring income taxes b. claiming your young children as tax exemptions c. claiming your dog as a dependent on your tax form d. buying a house in order to deduct interest payments e. overestimating your income subject to taxes
If inflation is expected by both borrowers and lenders, then we would expect
a. real rates to be higher than nominal rates of interest. b. real rates to be equal to nominal rates of interest. c. real rates to be lower than nominal rates of interest. d. nominal rates of interest to be less than the expected inflation rate.
The economic way of thinking includes:
A) more attention paid to benefits rather than the costs involved in any choice. B) the assumption that individuals choose to average out some objective. C) emphasis on how choices are made at the margin. D) the notion that the industrialized nations have solved the problem of scarcity.