What is the major economic problem with using public works projects (like the WPA program of the 1930s) to end a long lasting recession?
A. The generation of a high government deficit
B. The effect of the project on the incentive to work
C. The government's inability to eliminate the project completely when the economy has recovered
D. The increase in the national debt
C. The government's inability to eliminate the project completely when the economy has recovered
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The model predicting victory in a two-person race for the candidate closer to occupying the center of the voter distribution is built on the assumption that
A) people always vote for the Democratic candidate if they are Democrats and for the Republican candidate if they are Republicans. B) people vote for the candidate who comes closer to matching their own views. C) most people don't vote unless the election is predicted to be close. D) none of the above
Which one of the following is an example of discretionary fiscal policy used to correct a recessionary gap?
A. an increase in the money supply by the Federal Reserve B. a decrease in government expenditures approved by Congress C. a tax decrease passed into law by Congress D. an agreement among major banks to raise interest rates