A price floor set above the equilibrium price is binding

Other things equal, a marginal propensity to import of 0.8 implies that a $100 million increase in domestic income will lead to an $80 million decrease in net exports

a. True b. False Indicate whether the statement is true or false

The U.S. government need never default on its debt because

a. it can easily nationalize banks, who own all the debt, and then owe it to itself. b. it can raise the funds it needs to repay by taxation, and it can print money to repay. c. it owes the debt to itself, and it can always ignore a demand for repayment. d. it can simply reduce spending enough to generate funds to repay its debt.