Historically, the largest U.S. federal budget deficits as a percentage of GDP in the 20th century occurred during
A) the Great Depression.
B) the Vietnam war.
C) World War I and World War II.
D) 1970-1997.
E) 1998-1999.
C
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If we compare the four sources of spending in the economy we see that
A) household consumption is the smallest. B) government expenditure is the largest. C) business investment is the largest. D) household consumption is the largest.
Which of the following would be included in the expenditures approach to calculating U.S. GDP?
a. Wage and salary payments to U.S. workers b. Interest paid on borrowed funds c. Government payments of social security benefits d. Purchases of new trucks by Federal Express e. Wage payments to U.S. citizens working outside the U.S.
If the government imposes a $3 tax in a market, the equilibrium price will rise by $3
a. True b. False Indicate whether the statement is true or false
As discussed in the Case in Point on the size of the fiscal multiplier, a study conducted by John Taylor on the effect of fiscal policy since the year 2000 suggests that
A) the multiplier effect of fiscal policy is much less than that for monetary policy. B) temporary fiscal policy financed through government borrowing implies a multiplier value between 0.8 and 1.5. C) fiscal policy has little effect on the economy and that the multiplier value is effectively zero. D) statistical models are inadequate to determine the multiplier and the multiplier value likely varies based on the state of the economy.