If there is no Ricardo-Barro effect, an increase in the government budget deficit
A) lowers the equilibrium real interest rate.
B) decreases the demand for loanable funds.
C) increases the supply of loanable funds.
D) decreases the supply of loanable funds.
E) raises the equilibrium real interest rate.
E
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The government of Silverado raises revenue through a general income tax paid by all its residents to operate the city's marina. The marina is used by private boat owners. This method of raising revenue to operate the marina is
A) inconsistent with the benefits-received principle. B) consistent with the benefits-received principle. C) consistent with the ability-to-pay principle. D) inconsistent with the ability-to-pay principle.
Real wages have fallen in the U.S. since 1973 for which of the following reasons?
A. Productivity growth slowed down during this period. B. American factories were closing left and right as our relatively high-paying manufacturing jobs went to other countries. C. The decline in the percentage of better-paid, unionized workers in the United States. D. All of the choices are correct.
Over the long run, a government's fundamental source of revenues is
A. issuing bonds. B. printing money. C. exports. D. user fees and taxes.
The Federal Reserve does not target both the money supply and an interest rate because
A) it would be too confusing to Wall Street and would disrupt the financial markets. B) it would be too easy for Wall Street to determine what policy the Fed is following and this would destabilize the economy. C) it would be illegal according to the Federal Reserve Act. D) the Fed cannot achieve a target for both the money supply and an interest rate at the same time.