The Long-Run Budget Constraint Will Be Met as Long As

question 123

Multiple Choice

The long-run budget constraint will be met as long as:

• A) a nation limits its borrowing to half the outstanding debt.
• B) the present value of GDP is the same as the present value of yearly consumption.
• C) a nation's productivity grows along with its population.
• D) the government is stable and external shocks are minimal.

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Definitions:

Mark-up

The amount added to the cost price of goods to cover overhead and profit, determining the selling price.

Deferred Tax Asset

Financial accounting that recognizes reduced income tax in the future due to deductible temporary differences and carryforwards.

Unrealised Profit

Profit that has been generated but not yet realized through a transaction, such as an increase in value of an investment that has not yet been sold for cash.