Ceteris paribus, deficit spending results in higher interest rates, which can
A) ultimately have a positive impact on productivity gains and society's standard of living.
B) accelerate growth in investment spending.
C) crowd out private investment.
D) increase the wealth of future generations.
C
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Does a 21 year old who inherited millions of dollars' worth of corporate stock and who never works supply anyone with productive services?
A) No, by definition. B) Only if her wealth is invested in capital equipment that adds to economic growth. C) Only if others are willing to pay to watch her enjoy life. D) Yes, if she supplies the services of the resources she owns.
The managers of government bureaucracies have an incentive to _____
a. maximize the size of their budgets b. minimize the size of their staff c. maximize the profits from their bureaus d. minimize rent-seeking