For each of the following scenarios, state the effect on the debt-to-GDP ratio:
a. The growth rate of the labor force increases.
b. The primary deficit increases.
c. Total factor productivity decreases.
d. Seigniorage decreases.
e. The nominal interest rate is constant and the growth rate of the money supply increases.
f. The nominal interest rate is not constant and the growth rate of the money supply increases.
a. If the growth rate of the labor force increases, the debt-to-GDP ratio will decrease.
b. If the primary deficit increases, the debt-to-GDP ratio will increase.
c. If total factor productivity decreases, the debt-to-GDP ratio will increase.
d. If seigniorage decreases, the debt-to-GDP ratio will increase.
e. If the nominal interest rate is constant and the growth rate of the money supply increases, the debt-to-GDP ratio will decrease.
f. If the nominal interest rate is not constant and the growth rate of the money supply increases, the debt-to-GDP ratio will be ambiguous.
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An increase in the price level causes a movement down the aggregate demand curve
Indicate whether the statement is true or false
The long-run equilibrium price-output combination for a monopolist is economically inefficient because:
a. it does not operate on the minimum point of its marginal-cost curve. b. it does not produce the level of output at which price equals marginal cost. c. consumer surplus is maximized but not producer surplus. d. producer surplus is maximized but not consumer surplus. e. it operates on the downward sloping portion of the average-total-cost curve.