When the economy is operating close to potential, the budget deficit experienced is:
A. primarily structural.
B. neither structural nor cyclical.
C. primarily cyclical.
D. about evenly split between structural and cyclical.
Answer: A
You might also like to view...
Compared to the case in which a monopoly insurer offers the consumer a contract, if insurance is competitively provided:
a. any moral hazard or adverse-selection problem is alleviated. b. any moral hazard or adverse-selection problem is worsened. c. the essence of any moral hazard or adverse-selection problem would not change much. d. insurers would no longer offer menus of contracts.
If no fiscal policy changes are made, suppose the current aggregate demand curve will increase horizontally (shift rightward) by $1,000 billion and cause inflation. If the marginal propensity to consume is 0.90, federal policymakers could follow Keynesian economics and restrain inflation by decreasing:
a. government spending by $100 billion. b. taxes by $100 billion. c. taxes by $1,000 billion. d. government spending by $1,000 billion.
Jane is a 22-year-old college graduate. She has just started working at a job that pays her $75,000 per year. Since you have had an economics course, Jane asks you for advice on where to invest the money she is saving for her retirement. What do you recommend?
Financial intermediaries are:
A. government officials who bring together buyers and sellers in a market. B. those who negotiate terms of settlement between borrower and lender when one is in default. C. institutions that channel funds from people who have them to people who want them. D. those who negotiate terms of settlement between buyer and seller when one is in default.