To close an inflationary gap, the government will
a. run budget deficits
b. decrease taxes, leaving government spending unchanged
c. increase both taxes and government spending
d. run budget surpluses
e. legislate a reduction in the rate of inflation
D
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Suppose in Zurich £/$ = 0.5, while in New York SF/$ = 2.5, but in London £/SF = 0.1
(a) Is there any arbitrage profit that could be made with a triangular arbitrage action? Describe an example of how such a profit may be earned. (b) What would you guess about the relationship between the dollar rates and cross-rates after arbitrageurs notice this profit opportunity?
What happens in public schools when government funds subsidize education?
A) There is a shortage of schools. B) The quality of education rises. C) The cost of providing the education is less than what the student pays. D) The cost of providing the education is more than what the students pays.