Question
Which of the following statements is true? a. Gross government debt is the outstanding stock of bonds that will be issued in the future. b.
Which of the following statements is true?
a. Gross government debt is the outstanding stock of bonds that will be issued in the future.
b. Gross government debt excludes the government debt that is held by the Federal Reserve.
c. Net Government debt is the amount of debt that is held by other branches of the government.
d. Net Government debt is the amount of debt that is held outside the government.
The Zero Lower Bound refers to a situation where
a. The economic growth of a country (during a recession) has reached zero percent and won't decline any further.
b. The inability of the Federal Reserve to stimulate the economy by reducing real interest rates any further because the nominal rate is already at zero.
c. The ability of the government to employ fiscal policy to stimulate the economy despite zero demand for government products.
d. The inability of people to consume more because their permanent income does not grow faster than 0%.
People who prefer smooth consumption over time should
a. base their consumption on current income rather than lifetime resources.
b. increase saving when current income falls.
c. save more in response to transitory increase in income.
d. consume more of a temporary tax cut rather than permanent ones.
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