Whether or not deficits create a burden depends on how and why the government incurred the deficits in the first place. Explain
If the government runs deficits to fight recessions, more investment may be crowded in by rising output than is crowded out by rising interest rates. Deficits contracted to carry on wars certainly impair the future capital stock, although they may not be considered a burden for noneconomic reasons. Because these two cases account for most of the debt the U.S. government contracted until the mid-1980s, that debt cannot reasonably be considered a serious burden. However, some of the deficits since 1984 are more worrisome on this score.
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Capital per person in India is about six percent and per capita income is about eight percent of the U.S. level. Given that per capita income y = A , calculate the level of total factor productivity (A), relative to the U.S
level, that would be needed for India to match the U.S. level of per capita income. ( = 0.43)
The best practices frontier is similar in construction and meaning to the
A) the cost frontier. B) the absolute advantage frontier. C) production possibilities frontier. D) the supply and demand diagram.
A decrease in spending on new homes will, other things being equal:
A. increase aggregate demand. B. decrease aggregate demand. C. increase aggregate supply. D. decrease aggregate supply.
If households choose to take some fraction of each check they deposit and hold it as currency, then the simple deposit multiplier ________ the real-world multiplier
A) is greater than B) is less than C) is equal to D) bears no relationship to