Distinguish between fiscal imbalance and generational imbalance
What will be an ideal response?
Fiscal imbalance is the present value of the government's commitments to pay benefits minus the present value of its tax revenues. Generational imbalance is the division of the fiscal imbalance between the current and future generations, assuming that the current generation continues to enjoy the current levels of taxes and benefits.
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The economy's ability to coordinate economic activity is hindered by
A) auction prices. B) workers whose wages change quickly. C) sticky wages causing sticky prices. D) all of the above.
If the equilibrium price level is 135 but the actual price level is 120, then
A) firms decrease their production because they cannot sell the output they produce. B) the quantity of real GDP demanded is less than the quantity of real GDP supplied. C) the quantity of real GDP demanded is greater than the quantity of real GDP supplied. D) aggregate demand will increase to restore equilibrium. E) aggregate demand will decrease to restore equilibrium.
For economic imperialists, economics is more of a method of analysis than a specific field of study
Indicate whether the statement is true or false
Expansionary fiscal policy is likely to lead a nation's currency to depreciate
Indicate whether the statement is true or false