In 2005-2006, the magnitude of the federal budget deficit decreased, because
A. government spending increased precipitously.
B. growth in income increased tax receipts by more than government spending increased.
C. government spending decreased precipitously.
D. income tax rates were significantly increased across the board.
Answer: B
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In the long run, persistent inflation in the United States is caused by
A) leftward shifts in both the long-run aggregate supply curve and in the aggregate demand curve. B) rightward shifts in the long-run aggregate supply curve and the leftward shift of the aggregate demand curve. C) a faster rightward shift of the aggregate demand curve than the rightward shift of the long-run aggregate supply curve. D) leftward shifts in the aggregate demand curve while the position of the long-run supply curve is unchanged.
One of the reasons why wages are "sticky downward" is that union workers often operate under a multiyear contract with a company and make wage reductions difficult or impossible during the contract period
a. True b. False Indicate whether the statement is true or false