Consider Two Economies,A and B

question 66

Multiple Choice

Consider two economies,A and B.Economy A has a stock of government debt equal to $800 billion,while Economy B has a stock of government debt equal to $22 billion.In order to determine the economic importance of these government debt loads in the respective economies,it is necessary to know ________ for each economy.

• A)the level of government expenditures
• B)the net tax rate
• C)the primary budget deficit
• D)the GDP
• E)the stance of monetary policy

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Definitions:

Consumer Surplus

The difference between what consumers are willing to pay for a good or service versus what they actually pay, measuring the benefit to consumers from participation in the market.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, resulting in market equilibrium.

Consumer Surplus

The variance between the amount buyers are ready to spend on a good or service and the amount they actually pay.

Tariff

A tax imposed by a government on goods and services imported from other countries to regulate trade and protect domestic industries.