In the medium run, a tax cut that causes an increase in the budget deficit will affect which of the following?
A) the level of output but not its composition
B) both the level and composition of output
C) only the composition of output
D) only the price level
E) none of the above
C
You might also like to view...
The value of a household's assets minus the value of its liabilities is called
A) wealth. B) income. C) debt. D) stock.
Suppose you have a choice between receiving a lump-sum payment of $10,000 today or four annual payments of $2,750 (with the first payment today). Of the following, which is the lowest annual interest rate at which you would prefer the lump-sum payment over the four annual payments?
a. 2% b. 5% c. 7% d. 10%
"Dividing the economic pie more equally may reduce the size of the economic pie." This argument is characterized as:
A. a trade off between interest rates and unemployment. B. a form of discrimination. C. a conflict between equity and efficiency. D. a conflict between full employment and economic growth.
Which of the following would increase U.S. GDP?
a. Ford Motor Company begins to produce and sell cars in China.
b. Mercedes-Benz begins to produce and sell cars in Mississippi.
c. An American investor buys 100 shares of Ford stock.
d. An American investor purchases 100 shares of Mercedes-Benz stock.