When a government has decided on a permanent spending increase, a valid reason to increase borrowing rather than taxes might be to ________.
A) to avoid an unnecessary stimulus to aggregate demand
B) to shift the burden from domestic taxpayers to foreign bond holders
C) to avoid distortions that might reduce long-run aggregate supply
D) to avoid an increase in income inequality
Question 2
A new chain-weighted measure of real GDP
a. was introduced by the Bureau of Economic Analysis in 1995.
b. uses the average of prices in a given year and prices in the previous year instead of using prices in a base year as weights.
c. differs greatly from previous measures that utilized the base year method.
d. Both a and b
e. All of the above
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