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
c
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The standard of living rises at a slower pace than labor productivity if
A) n = q. B) n < q. C) n > q. D) The standard of living is not affected by the relative size of n and q.
If the Fed wants to lower the interest rate, it will
a. increase the money supply b. decrease the money supply c. increase money demand d. decrease money demand e. simply set a lower market interest rate