Whether or not deficits create a burden depends on how and why the government incurred the deficits in the first place. Explain
If the government runs deficits to fight recessions, more investment may be crowded in by rising output than is crowded out by rising interest rates. Deficits contracted to carry on wars certainly impair the future capital stock, although they may not be considered a burden for noneconomic reasons. Because these two cases account for most of the debt the U.S. government contracted until the mid-1980s, that debt cannot reasonably be considered a serious burden. However, some of the deficits since 1984 are more worrisome on this score.
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Refer to the tables below . For OMICS, the opportunity cost of producing an additional unit of B is:
Two nations, ECON and OMICS, each produce goods A and B. The table gives points on each nation's production possibilities curve.
A. 1/3 unit of A
B. 1/2 unit of A
C. 2/3 unit of A
D. 1 unit of A
Discouraged workers are included in the
A. labor force category. B. unemployed category. C. not in the labor force category. D. employed category.