In countries such as El Salvador or Ghana, tax revenue is extremely limited due to the lack of an adequate tax-collection agency. These countries most likely will issue bonds and sell them to the central bank in order to cover government expenditures. Thus, the lack of:
A. well-developed bond markets may lead these economies to inflation and poor economic performance.
B. a banking system may lead these economies to inflation and poor economic performance.
C. government intervention may lead these economies to inflation and poor economic performance.
D. property rights and laws may lead these economies to inflation and poor economic performance.
Answer: A
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An upward shift of the consumption function might be caused by:
a. an increase in disposable income. b. a decrease in disposable income. c. a decrease in the price level. d. a decrease in household wealth. e. an increase in the interest rate.
The remarkable fact about the structural deficit after 1983 was that it was
A. very high. B. very small for a period of economic recovery. C. very high during peacetime. D. high during Republican administrations.