Author Question: Wars of attrition arise in which of the following contexts? A) fiscal policy B) deficit ... (Read 268 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 U.S. Pharmacopeia Medication Errors Reporting Program states that approximately 50% of all medication errors involve insulin.

Did you know?

Blood is approximately twice as thick as water because of the cells and other components found in it.

Did you know?

According to the National Institute of Environmental Health Sciences, lung disease is the third leading killer in the United States, responsible for one in seven deaths. It is the leading cause of death among infants under the age of one year.

Did you know?

The immune system needs 9.5 hours of sleep in total darkness to recharge completely.

Did you know?

There are over 65,000 known species of protozoa. About 10,000 species are parasitic.

For a complete list of videos, visit our video library