If the government begins to run a larger budget deficits, then assuming there is no Ricardo-Barro effect, the demand for loanable funds ________ and the real interest rate ________
A) decreases; falls
B) decreases; rises
C) increases; rises
D) increases; falls
C
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High budget deficits may:
a. encourage overly expansionary fiscal policy. b. create higher inflation. c. increase the risk of sovereign debt default. d. all of the above.
The income approach to calculating GDP:
A. is more accurate than using the expenditure approach. B. is less accurate than using the expenditure approach. C. will generate the same answer as using the expenditure approach. D. is simpler to calculate than the expenditure approach.
A 5 percent increase in income leads to a 10 percent decrease in quantity demanded for a service. This service is a(n) __________ good and demand is __________
a. normal; elastic
b. normal; inelastic
c. normal; unit elastic
d. inferior; elastic
e. inferior; inelastic
Attempts to alleviate poverty have included all of the following income-maintenance programs EXCEPT
A. temporary assistance to needy families. B. Social Security. C. 401(k) plans. D. food stamps.