Forward-looking households may reduce consumption expenditures today if they believe that the government is currently
A) borrowing to run a budget deficit, and to pay back these loans in the future may require higher taxes.
B) running a budget surplus, and the increase in the government's supply of money will generate inflation in the future.
C) experiencing a balanced budget, and will therefore not be implementing any fiscal policy to stabilize the economy.
D) cutting federal spending to decrease the budget deficit, which will raise the real interest rate, the inflation rate , and the unemployment rate.
A
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The Social Security Administration estimates that the Social Security Trust Fund will ________ and that the Medicare Trust Fund will ________
A) become fully funded by 2036; become fully funded by 2024 B) continue to get smaller as the number of retirees increases; start to grow once funds from Obamacare are funneled to the program C) grow slowly as more workers retire; decline slowly as medical costs rise D) run out of funds in about 20 years; run out of funds in about 10 years
A rise in the nominal exchange rate ($/€) represents a depreciation of the dollar relative to the euro, but a rise in the real exchange rate ($/€) represent an appreciation of the dollar. Explain why this is true
What will be an ideal response?