Budget deficits are inflationary when
a. the Federal Reserve contracts the money supply.
b. the economy has lots of slack and the aggregate supply curve is horizontal.
c. the economy is at full employment and the aggregate supply curve is vertical.
d. private citizens buy the bonds to finance the debt.
c
Economics
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Budgets deficits can be a concern because they might
A) ultimately lead to higher inflation. B) lead to lower interest rates. C) lead to a slower rate of money growth. D) lead to higher bond prices.
Economics
Suppose that the production function is Y = AK0.35L0.65, the number of workers equals 800, the capital stock is $150,000, and real GDP is $750,000. What is the value of total factor productivity?
What will be an ideal response?
Economics