The government budget constraint implies that
A. government borrowings = government spending+ transfers - taxes and user charges.
B. government spending = government borrowing - transfers - taxes and user charges
C. government spending = transfers - taxes and user charges - government borrowing.
D. government borrowings = taxes and user charges + government spending - transfers
Answer: A
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A contractionary monetary policy causes
A) higher interest rates, which increases the foreign demand for U.S. financial instruments, which causes interest rates to decrease. There is no effect on net exports. B) higher interest rates, which decreases the foreign demand for U.S. financial instruments, raising the international price of the dollar and increasing net exports. C) higher interest rates, which increases the international price of the dollar and decreases net exports. D) lower interest rates, which decreases the foreign demand for U.S. financial instruments, raising the international price of the dollar and increasing net exports.
The short-run aggregate supply curve shows that a change in inflation will cause (a) change(s) in ________
A) output B) potential output C) expected inflation D) price shocks E) all of the above