Under a balanced budget policy, a sharp rise in GDP will cause
a. no serious budget changes.
b. a tax cut or an increase in expenditures.
c. a tax increase or expenditure cut.
d. tax receipts to exceed government expenditures.
b
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In early 2012 the price of computer hard disc drives rose. In a demand and supply model, shifts in what curve or curves could have brought about the higher price?
What will be an ideal response?
Briefly explain the command-and-control approach in dealing with an externality such as pollution. Give an example of the U.S. government using the command-and-control approach to deal with the pollution problem
What will be an ideal response?
Price discrimination is the practice of
A) charging different prices for the same good when the price differences arise because of differences in cost. B) charging different prices for the same good when the price differences are not due to differences in cost. C) charging higher prices for brand-named goods and lower prices for generic versions of the goods. D) charging different prices for different qualities of a product.
Suppose Ford Motor Company issues a 5% bond with a stipulation that if a national index of SUV sales drops by 10%, then Ford can decrease the coupon rate to 3%. This security is called a
A) credit option. B) credit swap. C) credit-linked note. D) credit default swap.