Use "wars of attrition" to explain the debate about deficit reduction
What will be an ideal response?
When country is facing large budget deficits, both parties in congress want to reduce the deficit, but they disagree about the way to do it: One party wants to reduce deficits primarily through an increase in taxes; the other wants to reduce deficits primarily through a decrease in spending. Both parties may hold out on the hope that the other side will give in first. Only when debt has increased sufficiently, and it becomes urgent to reduce deficits, will one party give up. These situations are reffed as wars of attrition. The fights between Congress and the Obama administration on how to reduce the large deficits triggered by the crisis are mostly driven by disagreements on whether deficit reduction should be achieved mainly through spending cuts or mainly through tax increases.
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What is the difference between wealth and income?
What will be an ideal response?
An increase in the demand for lobster due to changes in consumer tastes, accompanied by a decrease in the supply of lobster as a result bad weather reducing the number of fishermen trapping lobster, will result in
A) a decrease in the equilibrium quantity of lobster and no change in the equilibrium price. B) an increase in the equilibrium price of lobster and no change in the equilibrium quantity. C) a decrease in the equilibrium quantity of lobster; the equilibrium price may increase or decrease. D) an increase in the equilibrium price of lobster; the equilibrium quantity may increase or decrease.
Inflationary pressures caused the FOMC to increase the federal funds rate by ΒΌ of a percentage point in June 2004, and by exactly the same amount at every subsequent FOMC meeting through June of 2006. Theses actions
A) caused an upward movement along the monetary policy curve. B) caused a downward movement along the monetary policy curve. C) shifted the monetary policy curve upward. D) shifted the monetary policy curve downward.
What are the major criticisms of the Lorenz curve?
What will be an ideal response?