One way the government can boost the economy out of a recession is:
A. with public announcements telling the public to save their money.
B. by increasing government spending.
C. by setting price ceilings on most goods so people can afford them.
D. None of these will help an economy in recession.
Answer: B
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Which of the following REDUCES equality of income or wealth relative to the market distribution?
A) government payments to the poor B) a regressive income tax C) high taxes on bequests D) non-assortative mating
The "solvency condition" states that the debt-GDP ratio will rise continuously so long as
A) the real GDP growth rate exceeds the real interest rate. B) the real interest rate exceeds the real GDP growth rate. C) the real interest rate exceeds the nominal interest rate. D) the nominal interest rate exceeds the cost of borrowing.
If actual inflation is less than the expected rate of inflation, then probably
a. the borrower gains at the expense of the lender. b. neither the borrower nor the lender gains. c. the lender gains at the expense of the borrower. d. the purchasing power of the borrower is increased.
If a reform of the tax laws encourages greater saving, the result would be
a. higher interest rates and greater investment. b. higher interest rates and less investment. c. lower interest rates and greater investment. d. lower interest rate and less investment.