Question: 1 Over long periods of time, the present discounted value of tax revenue must be greater than or equal to the present discounted value of government expenditures. This statement illustrates the concept of a. income equality b. capital markets c. intergenerational equity d. intertemporal budget constraints
Economics: Public Economics
Question: 1
Over long periods of time, the present discounted value of tax revenue must be greater than or equal to the present discounted value of government expenditures. This statement illustrates the concept of
a. income equality
b. capital markets
c. intergenerational equity
d. intertemporal budget constraints
Question: 2
Why do some budget modelers criticize the use of static scoring?
a. The impact of government policy on the economy is not perfectly understood.
b. It is unreasonable to assume that government policy does not affect the size of the economy.
c. most policy does not result in individuals changing behavior.
d. government policy only changes distribution of resources, not their availability.
Question: 3
If the economy is in recession, the government budget deficit is ___ the cyclically- adjusted deficit.
a. the same as
b. unrelated to
c. smaller than (in absolute value)
d. greater than (in absolute value)
Question: 4
According to closed economy capital market model, when the government reduces the size of the deacit, the interest rate ___ and private investment in capital ____.
a. increases/increases
b. decreases/increases
c. decreases/decreases
d. increases/decreases
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