Which of the following would likely result if a constitutional amendment requires the U.S. government to balance its budget every year?
a. Fiscal spending would increase largely resulting in a higher government debt
b. Automatic stabilizers would cease to work and the severity of economic fluctuations would worsen.
c. Interest rates would become highly volatile with the increased use of discretionary monetary policies.
d. Unemployment would be below its natural rate and output would be at the potential level.
b
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Since the period following World War II (the early 1950s), the proportion of most countries' production being used in some other country
A) remained constant. B) increased. C) decreased. D) fluctuated widely with no clear trend. E) increased slightly before dropping off.
The growth rate of real GDP in Astoria is 7.5%. Assume the growth rate of velocity is constant at a rate of 5%
If Astoria wishes to decrease the inflation rate from the annual rate of 5.99% to a target rate of 4.5% and maintain its current growth rate of real GDP, what will the growth rate of the money supply need to be? A) 6.49%. B) 7%. C) 8%. D) 8.49%.