Use the following information to answer the next question.SecurityAmount (in billions)Treasury bills$220Corporate bonds140Treasury notes80Corporate stock200U.S. savings bonds60Treasury bonds100Other things equal, an increase of Treasury bonds from $100 billion to $120 billion in the economy would
A. not change the size of the public debt.
B. increase the public debt from $400 billion to $420 billion.
C. decrease the public debt by $20 billion.
D. increase the public debt from $460 billion to $480 billion.
Answer: D
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One objection to the notion of Ricardian Equivalence is that ________
A) households will recognize that a tax cut today will only lead to a tax increase in the future B) individuals are short-sighted in their spending decisions C) borrowing constraints have largely been eliminated due to financial innovation in the provisioning of consumer credit D) households typically save most of the monies received from a tax cut
Evidence concerning hyperinflation indicates a clear link between the money supply and the price level for
a. Austria in the 1920's. b. Hungary in the 1920's. c. Poland in the 1920's. d. All of the above are correct.
When prices rise, what happens to income?
a. It goes down. b. It buys less. c. It rises to meet prices. d. It is used to buy different things.
The Razor-Thin Disposable Razor Company is a perfectly competitive firm producing where MR = MC. The current market price of a disposable razor is $3.00. The firm sells 1,800 disposable razors. Its AVC is $4.00 and its AFC is $1.50. What should Razor-Thin do?
A. Continue to produce because price exceeds AFC. B. Increase production so that AFC will decrease. C. Shut down and produce zero razors because price is less than AVC. D. Decrease production so that AVC will decrease.