Assume a country is required by law to balance the budget every year. Suppose aggregate demand falls, causing a recession and a budget deficit
To balance the budget, what would the government need to do with the level of government spending and taxes? How would these changes in government spending and taxes affect aggregate demand and the economy?
To balance the budget, the government would need to lower government spending and raise taxes, both of which would decrease aggregate demand, making the recession worse.
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What is the difference between explicit costs and implicit costs? List three examples each of explicit costs and implicit costs that may be experienced by a small business
What will be an ideal response?
Regression analysis is used for prediction, while correlation analysis is used to measure the strength of the association between two variables
Indicate whether the statement is true or false
Mercantilists wanted a favorable balance of trade, by which they meant
a. exports = imports. b. exports > imports. c. exports < imports. d. To import nothing from the colonies.
Generational accounting refers to the
A. net tax rate of each generation, given the taxes they will pay, and the benefits they will receive. B. benefits received by each generation. C. tax rates paid by each generation. D. wealth of the old versus the wealth of the young.