It is likely that a constitutional amendment that required the government always to run a balanced budget would
a. contribute to a more stable level of output.
b. mitigate the crowding-out effect.
c. eliminate the economy's automatic stabilizers.
d. All of the above are correct.
c
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Which of the following statements is true?
a. Sales, excise, and flat-rate taxes violate the ability-to-pay principle of taxation fairness because each results in a greater burden on the poor than the rich. b. Government failure may occur if voters are rationally ignorant. c. Government failure may occur because of special-interest group political pressure. d. All of these.
In which of the following situations must national saving rise?
a. Both domestic investment and net capital outflow increase. b. Domestic investment increases and net capital outflow decreases. c. Domestic investment decreases and net capital outflow increases. d. Both domestic investment and net capital outflow decrease.