What reasons can you suggest for arguing that the federal government, unlike individuals, need never run a surplus budget?
When individuals run up debt, it must be eventually repaid. People in debt pay someone else. In the case of
the federal government, however, the people who get paid are the very people who must pay. In a real
sense, they pay themselves. The equation is simple: Interest paid out equals taxes paid in.
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Countries that have a trade surplus have a:
A. positive net capital outflow. B. positive net capital inflow. C. negative net capital outflow. D. positive foreign direct investment.
What is the law of comparative advantage, and why is it important in international trade?
(Consider This) The Native American arts and crafts story illustrates the twin ideas of:
A. product differentiation and monopolistic competition. B. excess capacity and monopolistic competition. C. local oligopoly and strategic behavior. D. pure monopoly and price discrimination.
If the economy experiences a recessionary gap then:
a. aggregate expenditures exceed the level of spending necessary to provide for full employment. b. Keynesian economics would recommend a reduction in government spending or an increase in taxes. c. Keynesian economics would recommend an increase in government spending or a decrease in taxes. d. the equilibrium level of output and income is above full employment.