Economists who are concerned with the effect of fiscal policy on the ability of households and firms to borrow to finance consumption will focus on ________, and economists who want to know whether the government's fiscal policy is sustainable will
focus on ________. A) yearly budget deficits; the federal debt
B) the federal debt; yearly budget deficits
C) yearly budget deficits; both the federal debt and yearly budget deficits
D) the federal debt; both the federal debt and yearly budget deficits
C
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Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
Dead capital is
A) machinery that requires constant maintenance. B) any capital resource that lacks clear title of ownershi
Refer to Figure 7.1. Suppose the city passes an ordinance banning loud music, and this directly impacts Angus's legal ability to play his bagpipes. The benevolent social planner would choose an outcome where Angus ________ and Dudley ________
A) plays the bagpipes; does nothing B) plays the bagpipes; calls the police C) mops floors; does nothing D) mops floors; calls the police
The monetary rule is the view of the:
a. Keynesians that monetary policy is most important. b. Monetarists that monetary policy is most important. c. Classical economists that monetary policy is most important. d. Monetarists that the Fed should expand the money supply at a constant rate.