The federal government budget deficits of the late 2000s were driven by:
a. foreign trade deficits.
b. increases in government spending.
c. declines in tax rates and tax revenue.
d. excessive money growth.
e. both b and c.
E
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Which of the following correctly describes the relationship between economic efficiency and economic equity?
A) There is often a trade-off between the two. B) There is no conflict between the two goals. C) They always call for opposite outcomes. D) They are both automatically achieved in a free market economy.
Adam Smith's invisible hand refers to
A) the laws of nature that influence economics decisions. B) the government's unobtrusive role in ensuring that the economy functions efficiently. C) property ownership laws and the rule of the court system. D) the process by which individuals acting in their own self-interest bring about a market outcome that benefits society as a whole.
There is ________ relationship between inflation and central bank independence and ________ relationship between long-run rates of unemployment and central bank independence
A) a negative; no B) a negative; a negative C) a positive; no D) a positive; a negative
One way the government can boost the economy out of a recession is:
A. with public announcements telling the public to save their money. B. by increasing government spending. C. by setting price ceilings on most goods so people can afford them. D. None of these will help an economy in recession.