Carefully explain why agricultural subsidies are viewed as harmful
What will be an ideal response?
Direct subsidies are viewed as harmful because they lead to overproduction, squeeze out imports, and in some cases result in the dumping of the surplus product in foreign markets.
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An expansion is:
A. the high point of economic activity prior to a downturn. B. the low point of economic activity prior to a recovery. C. a period in which the economy is growing at a rate significantly below normal. D. a period in which the economy is growing at a rate significantly above normal.
If all saving and investment could be placed into a tax-deferred saving account, then the federal income tax would approximate a consumption tax
a. True b. False
Economists disagree on most economic issues facing an economy.
Answer the following statement true (T) or false (F)
"Animal spirits" refers to
A) the stubborn refusal of many economic decision-makers to use rational expectations. B) movements in investment that cannot be explained by changes in current variables. C) the often-observed Fed refusal to cooperate with the government in setting its monetary policy. D) the impact of tax-evasion on the budget deficit. E) an exotic alcoholic drink favored by Wall Street traders.