One potential problem with using fiscal policy to close recessionary output gaps is that:

A. sustained government deficits can be harmful to long-run economic growth.
B. it may be offset by automatic stabilizers.
C. reductions in interest rates can reduce savings and, therefore, investment.
D. decreased government spending can cause inflationary pressure to build.


Answer: A

Economics

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BHP Billiton is a Canadian company that owns mines in Canada that

A) produce nickel. After World War II, BHP Billiton began to compete with another Canadian firm, the International Nickel Company. This competition eventually ended International Nickel's monopoly in this market. B) produce coal. Until World War II, BHP Billiton had a monopoly on coal in Canada. C) produce bauxite, the mineral needed to produce aluminum. BHP Billiton began to mine bauxite after World War II. This competition eventually ended the Aluminum Company of America (ALCOA)'s monopoly in this market. D) produce diamonds.

Economics

Exhibit 9-3 Keynesian aggregate expenditures model ? As shown in Exhibit 9-3, if GDP is $14 trillion, the economy experiences unplanned inventory:

A. accumulation of $12 trillion. B. depletion of $14 trillion. C. accumulation of $2 trillion. D. depletion of $4 trillion.

Economics

Which is assumed to be most limited in scope under a market system?

A. Freedom of choice. B. Government. C. Competition. D. Freedom of enterprise.

Economics

Medicaid is a health insurance program for the aged and certain disabled persons.

Answer the following statement true (T) or false (F)

Economics