The tax cuts and entitlement program expansions of the 1980s led to such ________ federal deficits in the 1990s that fiscal policy ________ for smoothing-out business cycle fluctuations
A) small, again became the preferred tool
B) small, was all but abandoned
C) large, again became the preferred tool
D) large, was all but abandoned
D
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When money supply __________, the real rate of interest __________
A) increases; falls B) increases; rises C) decreases; rises D) increases; remains unchanged
The market for used cars is shown in the above figure. Ten percent (10%) of all cars are lemons. A mechanic is offering to inspect a car for sale and certify that a car is not a lemon
If car sellers are risk neutral, what is the highest price that a car seller would pay for such a service? Who would buy this service?
The gambler's fallacy suggests that what happened in the past will influence the present. Suffering from the gambler's fallacy is most likely TRUE in which of the following situations?
A) flipping cards from a single deck B) tossing a fair coin C) the quality of play of a baseball team D) horse racing
If nominal GDP is $12 trillion and real GDP is $10 trillion, then the GDP deflator is
a. 83.33, and this indicates that the price level has decreased by 16.67 percent since the base year. b. 83.33, and this indicates that the price level has increased by 83.33 percent since the base year. c. 120, and this indicates that the price level has increased by 20 percent since the base year. d. 120, and this indicates that the price level has increased by 120 percent since the base year.