If a nation repaid its debts by raising taxes, the main effect would be to:
a. Create a wildly inflationary environment.
b. Contract the economy due to the decrease in the monetary base.
c. Expand the economy due to the increase in the monetary base.
d. Redistribute income if the debt was internally held and transfer spending abroad if it was externally held.
.D
You might also like to view...
The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
According to the modern expectational Phillips curve, unemployment will temporarily rise above the natural rate of unemployment when
a. any inflation is present. b. inflation turns out to be lower than what people expected. c. inflation turns out to be higher than what people expected. d. inflation turns out to be equal to what people expected.
When the real exchange rate for the dollar depreciates, U.S. goods become
a. less expensive relative to foreign goods, which makes exports rise and imports fall. b. less expensive relative to foreign goods, which makes exports fall and imports rise. c. more expensive relative to foreign goods, which makes exports rise and imports fall. d. more expensive relative to foreign goods, which makes exports fall and imports rise.
The invention of genetically engineered corn that prevents yield loss due to corn rootworm will
A. shift the supply curve of US corn to the right. B. shift the supply curve of US corn to the left. C. shift the demand curve for US corn to the right. D. shift the demand curve for US corn to the left.