It will be difficult to institute fiscal policy in a stabilizing manner because politicians will find
a. it more attractive to raise taxes than to increase spending.
b. it attractive to increase taxes during a recession, but they will be reluctant to reduce them during an expansion.
c. budget deficits attractive during a recession, but they will be reluctant to run budget surpluses during an expansion.
d. budget surpluses attractive during a recession, but they will be reluctant to run budget deficits during an expansion.
C
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Assume that emissions from electric utilities contribute to pollution in the form of acid rain. Which of the following describes how this affects the market for electricity?
A) The equilibrium in the market is not efficient; consumer surplus is equal to producer surplus. B) The equilibrium in the market is not efficient; because of the cost of the acid rain, economic efficiency would be greater if more electricity were produced. C) A deadweight loss occurs; at equilibrium the additional social cost of production is greater than the additional benefit to consumers. D) The equilibrium in the market is not efficient; the marginal benefit from electricity is greater than the marginal social cost.
What are the main arguments for and against Fed independence?
What will be an ideal response?