When the US government engages in deficit spending, that spending is primarily financed by

(a) increasing the required reserve ratio
(b) borrowing from the World Bank
(c) issuing new bonds
(d) appreciating the value of the dollar
(e) depreciating the value of the dollar


Answer: (c) issuing new bonds

Economics

You might also like to view...

The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:

A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.

Economics

Which of the following is directly accounted for in the calculation of GDP?

A) the value of one hour of leisure as measured by the hourly wage one would otherwise earn by working B) the value of repairing your own kitchen sink as measured by the average rates charged by local plumbers C) cash earnings from an illegal poker game D) improvements in quality of life from the reduction of pollution E) None of the above items is accounted for in GDP.

Economics

Some economists argue that since inflation

a. raises the real value of fixed nominal wages, a little inflation may make it easier for labor markets to adjust. b. raises the real value of fixed nominal wages, a little inflation may make it harder for labor markets to adjust. c. reduces the real value of fixed nominal wages, a little inflation may make it easier for labor markets to adjust. d. reduces the real value of fixed nominal wages, a little inflation may make it harder for labor markets to adjust.

Economics

The academic calendar for a university is August 15 through May 15. A professor commits to a contract that binds her to a teaching position at this university for this period. Based on this? information, the short run for the professor

A. will be the nine month period between August 15 and May? 15; any time period longer than this will be long run for her. B. will be the time period between August 15 and December? 31; any time period longer than this will be long run for her. C. will be the calendar year between January 1 and December? 31; any time period longer than this will be long run for her. D. will be the time period between August 15 of the current year and August 14 of the following? year; any time period longer than this will be long run for her.

Economics