Author Question: Wars of attrition arise in which of the following contexts? A) fiscal policy B) deficit ... (Read 271 times)

D2AR0N

  • Hero Member
  • *****
  • Posts: 561
Wars of attrition arise in which of the following contexts?
 
  A) fiscal policy
  B) deficit reduction
  C) hyperinflation
  D) all of above
  E) A and B

Question 2

Suppose policy makers pass a budget that results in an increase in the budget deficit. Also assume that this fiscal policy action results in a reduction in the saving rate. To what extent will this reduction in the saving rate cause permanent changes in the rate of growth of output per worker? Explain.
 
  What will be an ideal response?



Kaytorgator

  • Sr. Member
  • ****
  • Posts: 345
Answer to Question 1

D

Answer to Question 2

A budget that causes an increase in the budget deficit will cause a reduction in the saving rate. Reductions in the saving rate will only temporarily affect the growth rates of Y and Y/N. Once the new balanced growth equilibrium is achieved, the growth rates of Y and Y/N will return to their original levels.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question

D2AR0N

  • Hero Member
  • *****
  • Posts: 561

Kaytorgator

  • Sr. Member
  • ****
  • Posts: 345

 

Did you know?

The largest baby ever born weighed more than 23 pounds but died just 11 hours after his birth in 1879. The largest surviving baby was born in October 2009 in Sumatra, Indonesia, and weighed an astounding 19.2 pounds at birth.

Did you know?

A cataract is a clouding of the eyes' natural lens. As we age, some clouding of the lens may occur. The first sign of a cataract is usually blurry vision. Although glasses and other visual aids may at first help a person with cataracts, surgery may become inevitable. Cataract surgery is very successful in restoring vision, and it is the most frequently performed surgery in the United States.

Did you know?

The Babylonians wrote numbers in a system that used 60 as the base value rather than the number 10. They did not have a symbol for "zero."

Did you know?

Addicts to opiates often avoid treatment because they are afraid of withdrawal. Though unpleasant, with proper management, withdrawal is rarely fatal and passes relatively quickly.

Did you know?

About 3% of all pregnant women will give birth to twins, which is an increase in rate of nearly 60% since the early 1980s.

For a complete list of videos, visit our video library