If a nation repaid its debts by raising taxes, the main effect would be to:
a. Create a wildly inflationary environment.
b. Contract the economy due to the decrease in the monetary base.
c. Expand the economy due to the increase in the monetary base.
d. Redistribute income if the debt was internally held and transfer spending abroad if it was externally held.
.D
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The supply-side effects of a change in taxes on labor income means that ________ in taxes on labor income shifts the ________
A) an increase; labor supply curve leftward B) a decrease; labor demand curve rightward C) an increase; labor supply curve rightward D) a decrease; labor demand curve leftward E) an increase; labor supply curve leftward and the labor demand curve rightward
Suppose a firm pollutes a river when it produces a product. To achieve the efficient amount of output, a government could impose a ________ that equals the ________ of the pollution
A) pollution charge; marginal social cost B) pollution charge; marginal external cost C) pollution tax; marginal social cost D) pollution tax; marginal external cost E) pollution subsidy; marginal social cost