Which of the Following Should Economic Policymakers Consider to Be

question 104

Multiple Choice

Which of the following should economic policymakers consider to be associated with large deficits and a large debt-to-GDP ratio?

• A) the importance of economic growth
• B) the possibility of high inflation or default
• C) intergenerational equity
• D) the extent to which deficits crowd out private investment
• E) All of these answers are correct.

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Definitions:

Lessor's Implicit Interest Rate

The interest rate in a lease agreement that, when applied to the minimum lease payments, causes the present value of those payments to equal the fair value of the leased asset.

Present Value Factor

A formula used to calculate the present value of a sum of money to be received in the future, taking into account the time value of money.

Ordinary Annuity

A series of equal payments made at regular intervals (e.g., annually, monthly).

Executory Costs

Expenses incurred in maintaining the terms of a lease, typically including insurance, maintenance, and taxes paid by the lessee.