Suppose the federal government had budget surpluses of $80 billion in year 1 and $120 billion in year 2 but had budget deficits of $10 billion in year 3 and $40 billion in year 4. Also assume that it used its budget surpluses to pay down the public debt
At the end of these four years, the federal government's public debt would have:
A. increased by $50 billion.
B. increased by $150 billion.
C. decreased by $200 billion.
D. decreased by $150 billion.
D. decreased by $150 billion.
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A trade deficit can be financed by all of the following except
a. a surplus in the capital account. b. a surplus in the official reserves transaction account. c. selling U.S. assets to foreigners. d. U.S. citizens buying foreign stocks and bonds.
In order to assure allocative efficiency:
a. people's marginal rate of substitution must equal the economy's rate of product transformation. b. people's marginal rate of substitution must equal the firm's rate of technical substitution among inputs. c. a firm's rate of technical substitution must equal the economy's rate of product transformation. d. all of the above.