The government budget constraint implies that
A) government borrowings = government spending+ transfers - taxes and user charges.
B) government borrowings = taxes and user charges + government spending - transfers
C) government spending = transfers - taxes and user charges - government borrowing.
D) government spending = government borrowing - transfers - taxes and user charges
Answer: A
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Where the income line intersects the consumption curve, saving
a. equals consumption b. equals income c. is less than zero d. is equal to zero e. is greater than zero
According to Friedman, in which of the following situations is the economy in long-run equilibrium?
A) The average inflation rate over the past five years is 2 percent and the expected inflation rate is 2 percent. B) The expected economic growth rate is 3 percent and the actual inflation rate is 3 percent. C) The expected economic growth rate is 2 percent and the expected inflation rate is 2 percent. D) The expected inflation rate is 3 percent and the actual inflation rate is 3 percent.