Suppose a country has a real growth rate of 3%. Government spending is 75 billion units of currency and its tax revenues are 60 billion units of currency. The current national debt is 300 billion units of currency. At what inflation rate will its debt-to-income ratio remain unchanged?
Government spending exceeds tax revenues by 15 billion units of currency, which will raise the debt from 300 to 315 billion units, which is a 5% increase. Since the real growth rate is 3%, an inflation rate of 2% will leave the debt-to-income ratio unchanged
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Which of the following statements is true about marginal revenue?
A) If marginal revenue is zero, it means that quantity demanded falls to zero when a firm changes its price. B) Marginal revenue increases as price falls and quantity sold increases. C) If marginal revenue is negative, the additional revenue received from selling 1 more unit of the good is smaller than the revenue lost from receiving a lower price on all the units that could have been sold at the original price. D) If marginal revenue is positive, the additional revenue received from selling 1 more unit of the good is smaller than the revenue lost from receiving a lower price on all the units that could have been sold at the original price.
The endpoints (horizontal and vertical intercepts) of the budget line:
A) measure its slope. B) measure the rate at which one good can be substituted for another. C) measure the rate at which a consumer is willing to trade one good for another. D) represent the quantity of each good that could be purchased if all of the budget were allocated to that good. E) indicate the highest level of satisfaction the consumer can achieve.