One reason why the spending side of the budget is more susceptible to special interests than the tax side is because _____
a. spending can be allocated geographically, but taxation cannot
b. tax programs are largely determined by the Internal Revenue Service, not Congress
c. people do not care about taxation
d. the administrative costs of spending programs are lower, making change cheaper
a
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According to New Keynesians, an increase in which of the following will tend to cause the inflation rate to increase?
A) firms' average inflation adjusted per-unit costs of production B) anticipated future inflation C) an unexpected increase in aggregate demand D) all of the above
Fiscal policy is the responsibility of ________
A) the Federal Reserve System B) the Comptroller of the Currency C) the President and U.S. Congress D) High Commissioner for Refugees
The profit-maximizing manager of Big Farms wants to purchase a large piece of farm equipment. The manager has two financing options from two different banks. Big Bank will allow the manager to make five equal payments of $22,000 at the end of each of the next five years. Best Bank will allow the manager to make a payment of $10,000 at the end of the next four years and then make a balloon payment
of $72,000 at the end of the fifth year. If the interest rate is 4 percent, which of the following statements is true? A) The manager of Big Farms should select Big Bank's offer because the total repayment is less than the total repayment at Best Bank. B) The manager of Big Farms should select Big Bank's offer as the present value of the payment plan is $97,939.60, which is lower than the payment plan offered by Best Bank. C) The manager of Big Farms should select Best Bank's offer as the present value of the payment plan is $95,477.75, which is lower than the payment plan offered by Big Bank. D) The present value of the two payment plans is exactly the same, so the manager of Big Farms is indifferent between the two payment plans.
U.S. imports are most likely to increase when
A. U.S. GDP decreases. B. U.S. unemployment rates fall. C. U.S. prices fall. D. foreign prices rise.