What are the differences between the federal debt, the budget deficit, and the primary budget deficit?
What will be an ideal response?
The federal debt is the total value of government bonds outstanding. The budget deficit is annual difference between government expenditure and tax revenue. The primary budget deficit is the budget deficit excluding interest payments, or: government purchases of goods and services + transfer payments - tax revenues.
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If you sell your DVD player on eBay, you will be better informed about the quality of the product than any potential buyer. This is called
A) adverse selection. B) asymmetric information. C) moral hazard. D) opportunistic behavior.
What is an example of the bidder's curse?
A) addiction to auctions B) paying less than the auctioned good value C) Bid a value that is higher than the price of the good at a retail store. D) Never win an auction.