When a government has decided on a permanent spending increase, a ...

[burchfield96]

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

[cat123]

Answer to Question 1

C

Answer to Question 2

D