What is the disadvantage of using expenditure-based fiscal policy?
What will be an ideal response?
Rising government expenditures leads to more government borrowing, and such borrowing can soak up resources that would otherwise have been used by households and firms. Some economists believe that rising government expenditure displaces private economic activity like consumption and investment. This implies that employment increases by less than it would have otherwise increased.
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The objective of rent controls is to
A) ensure an adequate supply of rental housing for the poor. B) keep rents below levels that would be observed in a freely competitive market. C) encourage the construction of new rental units. D) raise revenue for the local government.
Approximately what percent of the world's income is received by the poorest one-fifth of the world's population?
A. 2. B. 5. C. 7. D. 10.
The federal government funds deficit spending by: a. issuing bonds
b. redeeming bonds. c. increasing taxes. d. providing and selling government services.
Give an example of a good that would be included in the GDP and another good that would not be included in the GDP. Explain why one would be included and the other wouldn’t. Avoid using examples given in the text.
What will be an ideal response?