Why do/should we care that federal expenditures are becoming an increasingly larger portion of GDP?
What will be an ideal response?
We should care that federal expenditures are becoming an increasingly larger portion of GDP because of public sector crowding out.
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While Keynesians and supply-siders agree that stabilization policy can affect levels of unemployment and inflation, they disagree over
a. how much taxes should be cut b. how much government spending should be increased c. how monetary policy should be used d. how consumers spend their tax reductions e. whether aggregate demand or aggregate supply is the critical variable
For a given price level, a downward shift of the expenditures schedule corresponds to an
A. inward shift of the aggregate demand curve. B. outward shift of the aggregate demand curve. C. outward shift of the aggregate supply curve. D. inward shift of the aggregate supply curve.
A country running a current account surplus over many years is likely to see its exchange rate:
A. hold steady. B. appreciate. C. the rate can rise, fall, or hold steady; the current account and the exchange rate are not linked. D. depreciate.
_____ said that "The government is best which governs least".
Fill in the blank(s) with the appropriate word(s).