Increases in the debt—GDP ratio are primarily caused by
A) a high growth rate of GDP.
B) a high government deficit relative to GDP.
C) increases in government borrowing through bonds.
D) increases in interest rates.
B
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Kara voluntarily quit her job as an insurance agent to return to school full time to earn an MBA degree. With degree in hand, she is now searching for a position in management. Kara presently is
A. structurally unemployed. B. cyclically unemployed. C. not a member of the labor force. D. frictionally unemployed.
There are two existing firms in the market for computer chips. Firm A knows how to reduce the production costs for the chip and is considering whether to adopt the innovation or not. Innovation incurs a fixed setup cost of C, while increasing the revenue. However, once the new technology is adopted, another firm, B, can adopt it with a smaller setup cost of C/2. If A innovates and B does not, A earns $20 in revenue while B earns $0. If A innovates and B does likewise, both firms earn $15 in revenue. If neither firm innovates, both earn $5. Under what condition will firm A innovate?
A. C < 30 B. 35 > C > 25 C. 10 > C > 0 D. C > 30