Which of the following best explains the political attractiveness of debt financing relative to taxation?
a. Debt financing pushes the visible cost of government into the future.
b. Debt financing exposes the current costs of government programs; taxes do not.
c. Debt financing reduces the attractiveness of special-interest spending.
d. Taxes allow politicians to supply voters with immediate benefits without having to impose a visible cost.
A
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When the marginal product is increasing as the quantity increases, then as the quantity increases, the
A) average product is decreasing. B) marginal cost is decreasing. C) total cost is decreasing. D) total product is decreasing. E) fixed cost is increasing.
According to the Taylor, if there is a recessionary gap of 3 percent of potential output and inflation is 4 percent, what real interest rate will the Fed set?
A. 0.02 B. 0.03 C. 0.015 D. 0.025