If a country’s GDP DECREASES, but its debt INCREASES during that year, then the country’s debt to GDP ratio for the year will _______________ in proportion to the magnitude of the changes.

Fiscal policy is concerned with:

a. encouraging businesses to invest. b. regulation of net exports. c. changes in government spending and/or tax revenues. d. expanding and contracting the money supply.

If the demand for a product increases as the result of a decline in income, it can be concluded that the

a. product is an inferior good. b. demand for the product is inelastic. c. price elasticity of demand for the product equals unity. d. demand for the product is elastic.