Answer the next question using the following budget information for a hypothetical economy. All data are in billions of dollars. Also assume that all budget surpluses are used to pay down the public debt. Government SpendingTax RevenuesGDPYear 1$800$825$4,000Year 28508504,200Year 39008754,350Year 49509004,500Year 51,0009254,600Assume that year 1 is the first year for this economy and year 5 is the current year. What is the public debt in this economy at year 5?
A. $75 billion
B. $25 billion
C. $925 billion
D. $125 billion
Answer: D
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Assume the required reserve ratio (RRR) is 10 percent. If the Fed purchases a $5,000 bond from a bond dealer who then deposits the $5,000 in a HSBC Bank account, what has happened to the money supply?
a. It has decreased by $5,000. b. It has increased by $5,000. c. It has decreased by $4,500. d. It has increased by $4,500. e. There has been no change in the money supply.
A situation in which one firm's actions with respect to price, quality, advertising and related changes may be strategically countered by the reactions of one or more other firms in the industry is known as
A) strategic dependence. B) economies of scale. C) the concentration ratio. D) barriers to entry.
If the demand for a good increases, the
a. demand for labor producing the good will increase b. demand for labor producing the good will decrease c. marginal labor cost will increase d. marginal labor cost will decrease e. marginal physical product of labor will increase
The CPI is a measure of the overall cost of the goods and services bought by
a. a typical consumer, and the CPI is computed and reported by the Department of the Treasury. b. typical consumers and typical business firms, and the CPI is computed and reported by the Department of the Treasury. c. a typical consumer, and the CPI is computed and reported by the Bureau of Labor Statistics. d. typical consumers and typical business firms, and the CPI is computed and reported by the Bureau of Labor Statistics.