The Long-Run Budget Constraint for a Nation Is

question 53

Multiple Choice

The long-run budget constraint for a nation is:

• A) GDP minus taxes to run the government.
• B) equal to GDP divided by the population.
• C) the level of external debt, offset by the sum of the present value of future trade surpluses taken to infinity.
• D) determined by its ability to lure international investment and capital inflows.

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Definitions:

Corporation

A legal entity separate from its owners, offering limited liability protection, the ability to raise capital through the sale of shares, and perpetuity.

Market Value

The market rate for buying or selling an asset or service currently.

Ownership

The state or fact of exclusive rights and control over property, which can be tangible or intangible.

Valuation Allowance

An accounting procedure that an entity might use against its deferred tax assets indicating that it is more likely than not that some portion or all of the asset will not be utilized.