In June of 2010, the government had a debt of about $8.6 trillion. Over the next year real GDP grew by about 1.6% and inflation was about 2%. What is the largest deficit the government could have run over this time without raising the debt-to-GDP ratio?

In order for a Pigovian tax to be effective, it must:

A. be imposed on the consumer. B. be imposed on those affected by the externality. C. be imposed on the producer. D. None of these statements is true.

Which of the following statements about consumer choice theory is true?

A. Given the limitations dictated by people's incomes and prices, it helps the consumer choose a commodity bundle of the highest level of utility. B. It provides insights into how consumers make decisions. C. It helps us understand changes in consumption patterns. D. All of these are true about consumer choice theory.