The opportunity cost of deficit spending is likely to be low:
a. only when it creates new physical capital
b. only when it creates new human capital.
c. only when it improves existing physical capital.
d. only when it improves existing human capital.
e. when it creates or improves physical or human capital.
e
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Which of the following would be expected to increase the demand for money in the U.S.?
A. Financial investors become concerned about increasing riskiness of stocks. B. The economy enters a recession. C. On-line banking allows customers to transfer funds between checking and stock mutual funds 24 hours a day. D. Political instability decreases dramatically in developing nations.
Even if a tax imposed in a market generates a loss in surplus for the participants in that market, the tax could still increase economic efficiency if:
A. the government needs to generate tax revenue. B. the public expenditures financed by the tax lead to a big enough increase in economic surplus. C. the tax revenue is used to fund spending by local governments. D. voters approve of the tax.
The incentive to work is an ingredient of the negative income tax because:
A. if families do work, they will be eliminated from the program. B. if families don't work, they will be eliminated from the program. C. the more income earned in the workplace, the higher the family's after-tax income. D. the more income earned in the workplace, the higher the payment from the government.
The aggregate supply-aggregate demand diagram relates various levels of
A. imports and exports of goods against exchange rates. B. all prices as measured by the CPI and production as measured by real GDP. C. the price and quantity of a particular good. D. production of two different goods.