If the deficit is 0.02 times GDP, the existing debt—GDP ratio is 0.5, and the growth rate of nominal GDP is 0.03, then the change in the debt—GDP ratio is

Which of the following is an example of a negative externality?

A) There is an increase in injuries to pedestrians caused by accidents resulting from electronic billboards distracting drivers. B) The opening of a new shopping mall increases the business of nearby restaurants. C) A consumer pays a higher price than another consumer does for the same product. D) Consumers pay a sales tax in addition to the price of a product.

If the full-employment level of real GDP is greater than the equilibrium level of real GDP, the nation would be experiencing a(n)

A) inflationary gap. B) recessionary gap. C) demand-pull inflation. D) rising prices.