The balance of payments can be thought of as the balance of economic transactions
a. True
b. False
A
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Suppose that the federal government had a budget deficit of $80 billion in year 1 and $90 billion in year 2, but that it experiences budget surpluses of $40 billion in year 3 and $20 billion in year 4
Also assume that the government uses any budget surpluses to pay down the public debt. At the end of these four years, the Federal government's public debt would have A) increased by $110 billion. B) decreased by $57.5 billion. C) increased by $230 billion. D) decreased by $110 billion.
At most museums, you can either buy a year-long membership that gives you free access to the museum any time, or you can pay a daily fee every time you visit. (Assume for purposes of this exercise that everyone can in principle afford the year-long membership.)
A. Those who choose to pay the daily fees all place the same value on their marginal museum visit. B. We cannot tell how much value anyone places on the marginal museum visit because we cannot compare utility across individuals. C. If someone is indifferent between the two options, she will go to the museum at least as much if she chooses the year-long membership than if she does not. D. Both (a) and (c) are true. E. Both (b) and (c) are true.
During the 2008 crisis, the Fed demanded interest payments on reserves held at the Fed
a. True b. False Indicate whether the statement is true or false
Suppose that a college physics experiment goes horribly wrong and releases an electronic pulse that renders all electronic equipment in the cities of Columbus, Cleveland and Cincinnati, Ohio permanently useless. No people are hurt, and no buildings are damaged. After the accident, the wages earned by Ohio workers will
a. increase because the marginal productivities of Ohio workers will increase. b. decrease because the marginal productivities of Ohio workers will decrease. c. decrease because the marginal productivities of Ohio workers will increase. d. increase because the marginal productivities of Ohio workers will decrease.