In 2009, the U.S. budget deficit was $1.4 trillion
a. True
b. False
Indicate whether the statement is true or false
True
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A tariff is
A) a subsidy granted to importers of a vital input. B) a tax imposed by a government on goods imported into a country. C) a limit placed on the quantity of goods that can be imported into a country. D) a health and safety restriction imposed on an imported product.
Which of the following shifts short-run, but not long-run aggregate supply to the right?
a. a decrease in the actual rate of inflation b. a decrease in the expected rate of inflation c. a decrease in the capital stock d. a drought in the Midwest agricultural areas.
The market overproduces goods that have external costs because producers:
A.) Do not experience the full costs of production for these goods. B.) Must bear higher costs than society experiences for these goods. C.) Expect the government to subsidize these goods. D.) Cannot compete with the government in producing these goods.
According to the Ricardian equivalence theorem, a tax cut that increases the government budget deficit will have
A. no effect on aggregate demand because people realize that there will be a future tax liability so that there is no increase in consumption expenditures. B. a positive effect on aggregate demand because people look at changes in taxes or government spending in the present. C. no effect on aggregate demand because people only look at changes in taxes or government spending in the present. D. an effect on aggregate demand. The magnitude the effect will have depends upon whether the increase is caused by a reduction in taxes or an increase in government spending.