Indicate what might be done to restrain the tendency of the democratic process to generate budget deficits?
A balanced-budget amendment to the Constitution might constrain deficits. Some believe a balanced-budget amendment would restrict Congress unduly, but spending in excess of revenues could be allowed with a supermajority vote. Another possible constitutional amendment would require a two-thirds vote of both houses of Congress to approve new taxes or debt. Also, some economists have suggested that congressional salaries be linked inversely to the debt. While controversial, this method would ensure that members of Congress had a monetary incentive to reduce the debt.
You might also like to view...
Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
Which of the following indicates when Stage II ends and Stage III begins in the short-run production function?
A) when AP = 0 B) when MP = 0 C) when MP = AP D) when MP starts to diminish
The adverse selection problem suggests that:
A. the ratio of lemons (low quality) to plums (high quality) is likely to be high. B. the ratio of plums (high quality) to lemons (low quality) is likely to be high. C. the price of lemons (low quality) will be below buyer's willingness to pay. D. plums (high quality) will sell for more than most buyers' willingness to pay.
If foreigners are restricted in their ability to sell investments in a country then that government is imposing:
A. controls on both capital inflows and outflows. B. controls on capital inflows. C. fixed exchange rates. D. controls on capital outflows.