When there are credit-market imperfections, an increase in government debt may be advantageous because it
A) discourages credit-constrained consumers from borrowing too much.
B) allows credit-constrained consumers to consume more.
C) eliminates the problems that cause credit-market imperfections.
D) encourages more private saving.
B
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Using the official measure of unemployment, which of the following people is considered unemployed?
A) a part-time worker who wishes to work full time B) a person who gave up looking for jobs because he or she was discouraged about his or her job prospects C) a person who has been searching for work, but turns down a job paying a lower wage rate than desired D) a person who is working but expects to be laid off at the end of the month
Risks faced by multinational corporations include
A) changes in exchange rates. B) restrictions on ownership. C) repatriation of funds. D) cultural and religious philosophies. E) All of the above
A firm can maximize profit (net benefit) by choosing to produce that level of output at which
A. the additional revenue from the last unit sold equals the additional cost of that unit. B. the additional revenue from the last unit sold is just a little more than the additional cost of that unit. C. the difference between the additional revenue from the last unit sold and the additional cost of that unit is maximized. D. total revenue equals total cost.
Suppose the economy experiences a recessionary gap. Policymakers who believe that government is too big would favor which of the following policies to close the gap?
A) decreases in transfer payment B) decreases in income tax rates C) increases in government purchases D) increases in interest rates