The two ways in which deficit spending can impose a burden on future generations are
A) by requiring future generations to face lower government spending and to utilize a smaller stock of human capital.
B) by requiring future generations to face higher taxes and to work with a lower accumulated stock of capital goods.
C) by substituting private goods for public goods and thereby benefiting only large businesses.
D) by substituting private goods for public goods and thereby shifting resources to foreign residents.
B
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If marginal costs are constant what will the average variable cost curve look like? What about the average total cost curve?
What will be an ideal response?
Which of the following is true?
a. The fraction of their total disposable income that households spend on consumption is called the marginal propensity to consume. b. As the real interest rate falls, additional projects with lower expected rates of return become profitable for firms, and the demand for investment curve shifts right. c. Firms with excess inventories of finished goods have an increased incentive to invest in new capital to put those inventories to productive use. d. None of the above is true.
If Sean sells Susan a DVD player for $30,
A) both Sean and Susan will gain from this transaction. B) the well-being of both parties will be unchanged. C) Sean will gain from the transaction, but Susan will lose. D) Susan will gain from the transaction, but Sean will lose.
Assume the supply curve for product X is perfectly elastic and that government imposes a $2- per-unit excise tax. We can conclude that the resulting:
A. increase in output will be greater the less elastic the demand curve. B. decrease in output will be greater the less elastic the demand curve. C. decrease in output will be greater the more elastic the demand curve. D. increase in output will be greater the more elastic the demand curve.