If no foreign residents owned any of the U.S. public debt, then it would be TRUE that
A. there would be no interest payments on the public debt.
B. U.S. residents would essentially owe the public debt to themselves.
C. there would be no distributional consequences associates with he public debt.
D. the public debt would naturally disappear over time.
Answer: B
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Explain why the curve between A and B looks different than the curve from A to C. Provide an example of how a firm could opt to follow the A to C curve instead of the A to B curve.
What will be an ideal response?
Complements
What will be an ideal response?
Jeans in general have fewer close substitutes than a specific brand of jeans. Therefore, the demand for jeans in general will be ________ than the demand for a specific brand of jeans.
A. less inelastic B. less elastic C. more unit elastic D. more elastic
Suppose you are deciding whether to spend your tax rebate check on a new iPod or a new digital camera. You are dealing with the concept of
A. opportunity costs. B. comparative advantage. C. the fallacy of composition. D. equity.