The difference between the federal budget deficit and the national debt is that the:
a. deficit is a stock variable and the debt is a flow variable.
b. deficit is a flow variable and the debt is a stock variable.
c. debt includes interest payments and the deficit does not.
d. deficit can be positive, but the debt cannot.
e. debt can be negative, but the deficit cannot.
Question 2
Suppose there is a 5 percent increase in the nominal wages of workers in an economy. The annual rate of inflation in the economy is about 2 percent. Which of the following is true in this case?
a. Real wage would fall by about 10 percent.
b. Real wage would increase by about 20 percent.
c. Real wage would fall by about 25 percent.
d. Real wage would increase by about 50 percent.
e. Real wage would increase by about 3 percent.
