Inflation accounting for the debt argues the following:
a. The change in the value of the debt when inflation occurs complicates income tax codes, and is the reason for the tax changes of 2003.
b. The portion of interest payments that compensate lenders for inflation should be considered repayment of debt rather than interest expense.
c. The debt represents an inflationary problem, and grows more rapidly when people fear inflation.
d. The portion of the deficit dedicated to repayment of interest on the debt should not be considered part of the deficit, because it is a transfer.
b
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In 1973 and again in 1979, the Organization of Petroleum Exporting Countries (OPEC) raised the world price of crude oil and increased their revenue as well. Which of the following is a TRUE statement regarding these OPEC price hikes?
A) Their revenue increased because the demand for oil was income inelastic. B) Their revenue increased because the demand for oil was price inelastic. C) Their revenue would have increased regardless of income elasticity or price elasticity because oil is an imported product for most nations. D) Their revenue only increased because oil was already very expensive.
________ is considered a high income country, ________ a developing country, and ________ a newly industrializing country
A) Canada; France; Singapore B) Honduras; New Zealand; South Korea C) Japan; Hong Kong; South Korea D) United States; Somalia; Taiwan
New Keynesian economists generally argue that
A) there is an exploitable tradeoff between unemployment and inflation. B) changes in aggregate demand will have relatively greater effects on real GDP when firms change prices less frequently. C) activist policy can be used to reduce the fluctuations in real GDP. D) all of the above
The relationship between quantity supplied and price is __________ and the relationship between quantity demanded and price is ____________.
A. direct; direct B. inverse; inverse C. inverse; direct D. direct; inverse