Widespread acceptance of the Keynesian theory of fiscal policy
a. caused most economists to reject the public choice view of budget deficits.
b. relaxed the political pressure to balance the budget and, hence, paved the way for the persistent budget deficits of the last five decades.
c. was based on the view that continual budget deficits would help stabilize the economy.
d. increased the pressure for a constitutional amendment mandating that the federal government balance its budget.
B
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Explain the law of diminishing returns
What will be an ideal response?
In a closed economy, private saving is
a. the amount of income that households have left after paying for their taxes and consumption. b. the amount of income that businesses have left after paying for the factors of production. c. the amount of tax revenue that the government has left after paying for its spending. d. always equal to investment.
The Federal Reserve was created in:
A. 1893. B. 1913. C. 1921. D. 1933.
Baxter International, a manufacturer of hospital supplies, acquired American Hospital Supply, a distributor of hospital supplies. This is an example of
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