You have just been elected President of the United States, based on your campaign promise to buy everyone a new sport utility vehicle. What are your funding options for this spending program, and what are the implications of each option?
You can (1) commandeer resources, (2) raise taxes, (3) cut spending in other areas, or (4) sell bonds and
incur government debt. You will alienate the owners of the resources you commandeer if you choose
option #1, taxpayers if you choose option #2, and beneficiaries of the programs you cut if you choose #3 .
Choosing option #4 may lead to a redistribution of income from the poor to the wealthy, or from taxpayers
to foreigners. Option #4 may also crowd out private investment, or may create inflation.
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The interest rate on Baa corporate bonds is ________, on average, than interest rates on Treasuries, and the spread between these rates became ________ in the 1970s
A) lower; smaller B) lower; larger C) higher; smaller D) higher; larger
Special interest groups are established on the basis of
A. sources of labor. B. size of income. C. sources of income. D. region. E. all of these answer options are correct.
Which of the following is an example of a "how much" decision?
A) The Pleasantville movie theatre is open only in the evenings. The theatre's manager is debating whether to add daily matinee shows. B) The Zhous have demolished their old home and are debating whether to build a ranch-style house or a Craftsman home. C) You're planning to hold a graduation party and must decide between having your party catered or having a pot-luck. D) Chelsea has withdrawn from the swim team to take a full-time job.
When a bank sells capital stock (equity shares) in return for cash:
A. The capital stock increases the assets side and the cash increases the liabilities side B. The capital stock decreases the liabilities and the cash increases the assets side C. The capital stock increases the net worth and the cash increases the liabilities D. The capital stock increases the net worth and the cash increases the assets side