If the government decreased income taxes by $500 billion and does not pursue a policy change, which of the following would require the private sector to adjust in order to finance the tax decrease?
A) Increase other taxes by $500 billion.
B) Reduce transfer payments by $500 billion.
C) Reduce expenditures on programs such as education or defense by $500 billion.
D) Issue $500 billion in new Treasury Bonds.
D
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A rise in stock prices ________ the net worth of firms and so leads to ________ investment spending because of the reduction in moral hazard
A) raises; higher B) raises; lower C) reduces; higher D) reduces; lower
A point lying beyond the utilities possibilities frontier is
A) unattainable. B) efficient. C) inefficient. D) profitable.
Assume that potential GDP is $200 billion and the multiplier equals 5 . The recessionary gap is $10 billion. What is the actual level of equilibrium income?
a. $200 billion b. $150 billion c. $100 billion d. $80 billion e. $50 billion
What country is the world's largest exporter of services?
(A) Germany (B) United States (C) Great Britain (D) Japan