A true and unambiguous burden on future generations will be created whenever government deficit spending
A) increases the ratio of government expenditure to GDP.
B) pays for goods that yield no future benefits.
C) is used as part of a countercyclical fiscal expansion.
D) pays for capital expenditures.
B
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Answer the following statement(s) true (T) or false (F)
1. A competitive firm's short-run demand for labor will rise when the price of its product rises. 2. Increased use of machinery always hurts workers by lowering the demand for their labor. 3. As the wage rate rises, the marginal revenue product of labor increases. 4. f labor and capital are complements in production, additions to capital will increase both the total and marginal products of labor. 5. When two factors are substitutes in production, an increase in the employment of one increases the marginal product of the other.
If real GDP is less than potential GDP, the economy is
A) not in macroeconomic equilibrium. B) at full employment. C) in an above-full-employment equilibrium. D) in a below-full-employment equilibrium.
A country has a trade surplus when
A) imports exceed exports. B) imports equal exports. C) exports exceed imports. D) imports equal zero.
Suppose that the state of California imposes a minimum wage of $7 per hour. In the entry-level labor market in California fast-food restaurants, the quantity of labor demanded at $7 per hour is 800 thousand, and the quantity of labor supplied is 1.2 million. Which of the following is true?
a. There is a shortage of 800 thousand workers in the labor market. b. There is a shortage of 400 thousand workers in the labor market. c. There is a surplus of 400 thousand workers in the labor market. d. There is a surplus of 1.2 million workers in the labor market.