In the long run,
a. large government budget deficits cause productivity to increase, thereby leading to inflation
b. large government budget deficits drive down interest rates and reduce investment spending
c. large government budget surpluses mean reductions in the money supply
d. changes in the government budget deficit have no effect on the capital stock
e. large government budget deficits drive up interest rates and reduce investment spending
E
You might also like to view...
The production of cigarettes is highly automated; however, a worker is required to monitor each machine. Machines and workers do not interact with one another. Given this information, there are most likely
A) economies of scale. B) economies of scope. C) constant returns to scale. D) increasing returns to scale.
Which of the following statements is TRUE regarding the textbook used in this course?
A) The textbook presents only economic theory, so no value judgments are involved in the text. B) The textbook does not include normative statements. C) The microeconomic section of the book includes only positive analysis while the macroeconomic section includes normative analysis. D) The selection of topics included in the book involves value judgments as well as economic theory.