If there is initially a federal budget deficit, and taxes rise, while transfer payments fall:
a. AD increases and the budget deficit increases.
b. AD increases and the budget deficit decreases.
c. AD decreases and the budget deficit increases.
d. AD decreases and the budget deficit decreases.
d
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Which of the following individuals would be most negatively affected by anticipated inflation?
A) a student who borrows $10,000 at a nominal interest rate of 5% to finance educational expenses B) a full-time employee at a pizza parlor who makes more than the minimum wage C) a retired railroad engineer who receives a fixed income payment every month D) a union contractor whose pay is adjusted based on changes in the CPI
A government strong enough to protect individual rights is also strong enough to violate them
a. True b. False
Explain how the use of leading economic indicators to predict recessions can lead to less accurate policy decisions
The recovery phase of the business cycle ends when
A. we reattain the level of the previous peak. B. we reattain the level of the previous trough. C. we go into the next recession. D. we are back at full employment.