Posted: September 26th, 2016

Inflation can reduce debt because?

Opportunity Cost is a concept
a used to comply with Generally Accepted Accounting Principles
b The cost of the next best alternative
c really the same as Marginal Cost of producing an item
d none of the above
7 Deficit spending is
a can not be undertaken by small governments
b an established monetary policy tool
c can only be implemented by the Fed
d an established fiscal policy tool
8 What annual deficit could a $55 billion economy growing at a real annual rate of 5% have without changing its debt burden?
a $150 million
b $250 million
c $350 million
d none of the above
9 The effect of contractionary monetary policy on the exchange rate through income and price:
a It pushes up the interest rate
b It decreases income and, thus, imports
c It has a tendency to decrease inflation
d All of the above results in increase of the exchange rate
10 The following topics are included in Macroeconomics except
a Impact of taxes on aggregate output
b the effect of trade on economic growth
c how firms set the price and quantity of their products
d military spending
11 Firms prefer quotas to tariffs because
a with quotas they receive more profits
b with tariffs they receive more profits
c neither makes a difference a firm
d none of the above
12 Inflation can reduce debt because
a it reduces the value of the currency, so debt is paid back with cheaper money
b it reduces the value of the c

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