Q44. Paying off the national debt would redistribute income from the a. debt hol
ID: 1199891 • Letter: Q
Question
Q44. Paying off the national debt would redistribute income from the
a. debt holders to the taxpayers
b. taxpayers to the major recipients of transfer payments
c. banks to the taxpayers
d. taxpayers to the debt holders
Q45. When the government uses tax revenue to pay off portions of the national debt, total purchasing power in the economy
a. increases
b. decreases
c. is not affected at any level
d. remains the same but changes individually
Q46. Which of the following would cause a credit to the U. S. balance of payments?
a. a group of U. S. citizens goes to New Zealand for a vacation
b. General Motors pays a dividend to a citizen of Brazil
c. Lloyd's of London makes an insurance payment to a U. S. resident
d. Russia cancels its purchases of U. S. wheat and buys wheat from Argentina
Q47. Under the gold standard, a country experiencing a gold outflow
a. has a balance of payments surplus
b. had an increasing money supply
c. experienced a decline in output
d. experienced an increase in output
Q48. Under the gold standard, a country with a trade deficit should expect
a. gold to flow out of the country to other countries
b. gold to flow into the country from other countries
c. the value of its currency to appreciate
d. the value of its currency to depreciate
Q49. The course of international monetary policy is directed primarily by the
a. Federal Reserve
b. World Bank
c. International Monetary Fund
d. leaders of the Group of Seven nations
Explanation / Answer
44. The option is A.
This is so because, the government collects tax from taxpayers and it uses it (some of it) to pay-off its national debt. So the taypayers money would be distributed to the debt holders.
45. OPtion D is correct.
This is so because as the government uses taxe revenue to pay-off its debt, only the pruchasing power of the debt-holders increases, and not of the entire economy.
46. Option C is correct.
Credit in balance of payment would imply inflow of capital from abroad. When Lloyd's paid for insurance payment to U.S the capital flowed into the economy, and hence a credit.
47. Option D is correct.
Under gold standard, the exchange of goods and services were bases on gold. So a nation experiencing an outflow of gold would imply increase in output because it would have exchanged gold with goods and services from abroad.
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