If the U.S. government spent $20 million paying people to dig holes in 2005 and then spent $30 million paying the same people to fill the holes up again that same year, we would expect the net effect to be a(n):
a. decrease in transfer payments
b. increase in the budget deficit as transfer payments increased
c. increase in the budget deficit as government purchases of goods and services increased by $50 million
d. increase in the budget deficit as government purchases of goods and services increased by $30 million
e. $10-million-dollar increase in the budget deficit
c
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A prolonged recession in Europe should decrease the
A. supply of U.S. dollars. B. demand for U.S. dollars. C. supply of U.S. goods and services. D. demand by Americans for euros.
Explain how the burden of a payroll tax changes if labor supply is relatively inelastic? Explain how your answer would change if labor supply is relatively elastic?
What will be an ideal response?
Explain why price and wage stickiness in the short run are reasons that macroeconomic shocks can result in fluctuations in total employment and total production
What will be an ideal response?
The benefits to a program are more difficult to quantify in dollar terms that the costs to a program
a. True b. False