What two fiscal policy measures do you recommend to remove it?
Lower taxes; raise G
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What are the main determinants of demand elasticity? Explain their importance.
What will be an ideal response?
Explain why Adam Smith believed that competitive markets are a key component of achieving the gains from the invisible hand
Bank regulators are concerned about the safety of depositors because
a. bank failures were common throughout most of U.S. history and have even occurred in recent decades. b. in the absence of federal insurance, depositors would lose their money if a bank failed. c. nervous depositors may rush to withdraw their accounts and produce a "run" that could threaten even a sound bank. d. All of the above are correct.
Adam Smith asserted that a person should never attempt to make at home
a. what it will cost him more to make than to buy. b. any good in which that person does not have an absolute advantage. c. any luxury good. d. any necessity.