Government deficits of one generation cannot affect the standard of living of the next generation
a. True
b. False
Indicate whether the statement is true or false
False
You might also like to view...
Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
An increase in government expenditure can ________ potential GDP and an increase in taxes can ________ potential GDP
A) increase; never change B) increase; increase C) decrease; decrease D) never change; never change E) increase; decrease
An increase in the real interest rate is an example of a
A) pure substitution effect. B) substitution effect and a positive income effect. C) substitution effect and a negative income effect. D) substitution effect and an income effect whose sign depends on whether the consumer is initially a borrower or a lender.
Autonomous consumption is always
A. positive. B. zero. C. negative.