Suppose the government wants to spend more. There is no unemployment. Which of the following would be the least inflationary?

A. Increase government expenditures and sell bonds to the Federal Reserve.
B. Increase government expenditures and taxes at the same time.
C. Increase government expenditures and reduce taxes.
D. Increase government expenditures and use money already in the Treasury to finance these expenditures.


B. Increase government expenditures and taxes at the same time.

Economics

You might also like to view...

Define marginal cost and marginal benefit

What will be an ideal response?

Economics

In the long run, following a combination of a negative demand shock and a temporary negative supply shock, ________

A) both inflation and output return to the original long-run equilibrium values B) inflation is permanently increased, while output returns to potential output C) output returns to potential output, while inflation may be higher or lower than its initial value D) inflation is permanently reduced, while output returns to potential output E) none of the above

Economics

Let the production function be q = ALaKb. The function exhibits constant returns to scale if

A) a + b = 1. B) a + b > 1. C) a + b < 1. D) Cannot be determined with the information given.

Economics

Based on Figure 3.2, it can be inferred that:

A) Alvin does not consider good X as "good." B) Alvin will never purchase any of good Y. C) Alvin regards good X and good Y as perfect substitutes. D) Alvin regards good X and good Y as perfect complements. E) none of the above

Economics