Which of the following is a valid concern about federal budget deficits?
a. The welfare of future generations will be directly related to the per-capita size of the national debt that they inherit.
b. Growth of the national debt will eventually lead to the bankruptcy of the government.
c. When the debt comes due, future generations may be unable to pay it off.
d. If the increases in the national debt reduce private expenditures on capital formation, aggregate demand is reduced.
d
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The Gulf Cartel and Sinaloa Cartel are the two major cartels in illegal drug trade in Mexico. Although, each of these cartels are better off sharing the market, they have an incentive to try to take the entire market. In which of the following ways is cheating among these cartel members dealt with in this region?
a. Through government taxation policy b. Through legally enforceable contracts c. Through restrictions on the supply of inputs used by the firms d. Through output quota and price ceiling e. Through violence and drug wars
During the period from 2001 to 2006, there were several major cuts in personal income tax rates. What effect did these have on the value of the multiplier?
a. They decreased the value of the multiplier. b. They had no effect on the multiplier. c. They increased the value of the multiplier. d. The effect was uncertain.