The large budget deficits of 2001-2011 were
a. financed entirely through borrowing from domestic sources.
b. accompanied by a rapid increase in private investment, which will enhance the welfare of future generations of Americans.
c. accompanied by an increase in consumption as a share of GDP, which indicates the current generation of Americans is gaining at the expense of future generations.
d. accompanied by large trade surpluses, which will enhance the welfare of future generations of Americans.
C
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Elite Astin-Martin Cars offers its customers a fancy showroom and a knowledgeable sales force. If Astin-Martins Are Us opens an outlet nearby, offering cut rate prices and little service, then Elite Astin-Martin Cars will likely find
a. more customers attracted to buying Astin-Martins and its sales will increase. b. more customers visiting its showroom, but lower sales. c. fewer customers visiting its showroom and lower sales. d. fewer customers visiting its showroom but more of them making a purchase.
Game theory is not useful in understanding perfect competition because in a perfectly competitive market:
A. there are too many firms to be able to model their behavior accurately using game theory. B. no single firm can influence the market price, so firms' decisions are not interdependent. C. the payoffs to firms' choices are unknown. D. each firm only cares about its own profit, so there is no interdependence.
A labor contract provides for a first-year wage of $10 per hour, and specifies that the real wage will rise by 3 percent in the second year of the contract. The CPI is 1.00 in the first year and 1.07 in the second year. What dollar wage must be paid in the second year?
A. $10.90 B. $10.70 C. $11.02 D. $10.30
Estimates of the value of a college education to the student are that there is
A. a $30,000 per year benefit. B. a $330,000 net present value loss. C. an external benefit. D. a $330,000 net present value benefit.