A proportional tax is a tax whose rate increases as the tax base widens

The Fed in the U.S

A) allows a flexible exchange rate, though their actions can impact the exchange rate. B) has no influence on the exchange rate. C) sells U.S. dollars to China in an attempt to depreciate the U.S. dollar. D) alternates between a flexible, fixed, and crawling peg exchange rate policy depending on economic conditions.

The government deficit does NOT place a burden on future generations when

A) taxes are eventually raised to pay interest on the additional debt. B) the borrowed funds are used for productive government investment. C) borrowing from foreigners offsets the deficit, so that private investment is not crowded-out. D) the borrowed funds are transferred to the purchase of nondurable consumer goods.