The new classical view argues that an increase in government debt will cause people to
a. increase their current saving so they will be better able to pay the higher future taxes implied by the increase in the debt.
b. increase their current consumption since the substitution of debt for taxes makes them wealthier.
c. shift their savings to foreign banks where they will be more secure.
d. do all of the above.
A
You might also like to view...
Explain how labor resistance and political and legislative influences reduce the ability of firms to minimize their costs of production. What do the two have in common in this regard?
What will be an ideal response?
Trend-wise, the worldwide population is going as follows:
a. More rural b. More urban c. Larger family size d. Rapidly decreasing in places like Sao Paolo, Brazil
Phase of the business cycle during which the economy is growing more slowly than usual
What will be an ideal response?
A model in which individual producers act as price setters, because there are only a few sellers and the product they sell is not standardized, is called
A. perfect competition. B. monopoly. C. imperfect competition. D. monopsony.