A decrease in government spending will cause a(n) ________.
A. decrease in aggregate demand
B. increase in aggregate demand
C. decrease in the quantity of real output demanded
D. increase in the quantity of real output demanded
Answer: A
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According to the budget philosophy of functional finance, _____
a. the budget should be balanced annually b. surpluses should be run during periods of prosperity and deficits should be run during recessions c. the government budget should be whatever is necessary to have the economy operate at potential GDP d. the budget should never be in balance e. the rate of growth in the national debt should equal the rate of growth in the money supply
The QWERTY story illustrates: a. the commons problem
b. a negative network externality. c. the path dependence to technology. d. the problem of adverse selection. e. a situation of moral hazard.