Author Question: According to the textbook, why didn't the U.S. government mount chronic budget deficits before 1970? ... (Read 27 times)

asan beg · **on:** Jun 29, 2018

According to the textbook, why didn't the U.S. government mount chronic budget deficits before 1970?

A) Elected officials didn't know how to use the federal budget as a policy tool.
B) Deficits were viewed as an irresponsible moral failure on the part of government.
C) The U.S. had a constitutional balanced budget amendment.
D) For all of the above reasons.
E) For none of the above reasons.

Question 2

What are price controls? How do they affect a market?

What will be an ideal response?

brittanywood · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

B

Answer to Question 2

Price controls are non-market price impositions. When price controls hold, the incentives that equilibrium prices provide to buyers and sellers are eliminated. If a price control is imposed above the equilibrium price of a good, the quantity supplied of the good exceeds the quantity demanded of the good. This represents a surplus in the market. If a price control is imposed below the equilibrium price of a good, the quantity demanded of the good exceeds the quantity supplied of the good. This results in a shortage in the market.