Based on this graph, national debt was the lowest percentage of GDP ______.
a. prior to the 1920s
b. during the 1950s
c. after World War II
d. in the 1990s
a. prior to the 1920s
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Other things constant, a decrease in the price of fertilizer will: a. increase the supply of wheat
b. decrease the supply of wheat. c. increase the demand for wheat. d. decrease the demand for wheat.
Ricardian Equivalence maintains that an increase in government spending financed by debt will result in a corresponding increase in
a. savings, in anticipation of future taxes. b. output and consumption, stimulated by the additional government spending. c. consumer spending, in anticipation of lower future taxes. d. aggregate demand, because the additional spending was financed by borrowing rather than current taxation.
Generally, if the inflation rate is too high, the Federal Reserve will want to raise the federal funds rate.
Answer the following statement true (T) or false (F)
Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the short run would be:
A. P3 and Y1. B. P2 and Y1. C. P2 and Y3. D. P1 and Y2.