The prevailing budget philosophy prior to Keynes called for a balanced budget. Keynes argued that the government should not balance its budget but instead have budget deficits during
a. economic booms.
b. during periods of peace but surpluses during periods of war.
c. periods of inflation.
d. economic recessions.
D
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Suppose voter preferences over a public good funded through a head tax are single peaked. If everyone has the same tastes and the public good is a normal good, then ideal points for higher income individuals will lie to the right of ideal points of lower income individuals.
Answer the following statement true (T) or false (F)
Suppose that U.S. inflation is 3 percent and Turkish inflation is 70 percent. The effect of this discrepancy on the foreign exchange market is that
A) the Turkish currency will depreciate. B) the dollar will depreciate. C) it is impossible for interest rate parity to hold. D) the Turkish currency will appreciate.
Which of the following examples is most typical of monopolistic competition?
a. ARD, Inc. competes with six other firms in the paper towel market. b. Tropics, Inc. is the only producer of guava in the international market. c. Glow, Ltd. and SolarMax, Inc, are the two major producers of solar panels. d. TropicFreeze, Inc. remains the sole producer of papaya ice cream.
Recessions...
What will be an ideal response?