In 2009 Greece's budget deficit rose and people became worried about the ability of the Greek government to continue to make payments on its debt. Which of these events raise a country's interest rates?
a. an increase in the budget deficit and increased concerns about the ability of the government to pay back its debt
b. an increase in the budget deficit, but not increased concerns about the ability of the government to pay back its debt
c. increased concerns about the ability of the government to pay back its debt, but not an increase in the budget deficit
d. neither an increase in the budget deficit nor increased concerns about the ability of the government to pay back its debt
a
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Trade between countries
a. allows each country to consume at a point outside its production possibilities frontier. b. limits a country's ability to produce goods and services on its own. c. must benefit both countries equally; otherwise, trade is not mutually beneficial. d. can best be understood by examining the countries' absolute advantages.
If an economy produced 60 pounds of sushi at $12 per pound and 15 gallons of sake at $30 per gallon, the total value of these goods and services would be
A) $450. B) $720. C) $1,170. D) $2,700.
Suppose that Emily opens a restaurant. She receives a loan from a bank for $200,000 . She withdraws $100,000 from her personal savings account. The interest rate on the loan is 6%, and the interest rate on her savings account is 2%. Emily's annual explicit cost of capital is
a. $2,000. b. $4,000. c. $12,000. d. $14,000.
Equal increases in government spending and taxes will:
a. lead to an increase in the equilibrium level of real GDP output that is larger than the initial change in government spending and taxes. b. cancel each other out so that the equilibrium level of real GDP will remain unchanged. c. lead to an equal increase in the equilibrium level of real GDP. d. lead to an equal decrease in the equilibrium level of real GDP.