If a nation uses all of its resources to produce capital goods, that will
a. force the government to increase its spending
b. leave the production function unchanged
c. rapidly increase the profitability of business firms
d. raise income and capital gains taxes
e. leave no resources available to produce consumption goods
E
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If the government spends exactly what it receives in taxes during a given interval, then the result is
A) a balanced budget. B) the gross public debt. C) the net public debt. D) a government budget deficit.
Which of the following statements is true?
A. Keynesians believe that consumers are inherently unstable in consumption decisions, but that businesses are relatively stable in making investment decisions. B. Monetarists believe in discretionary monetary policy. C. Lowering tax rates is the main priority of Supply Side economists. D. Rational expectationists argue that businesses have a poor record of anticipating government fiscal policy.