1.A consumption tax system is likely to benefit Select one: a. higher income ind

Question

1.A consumption tax system is likely to benefit


Select one:


a. higher income individuals.

b. lower income individuals.

c. an individual who, regardless of income, is a large consumer.

d. corporations.
2.A policy where the Federal Reserve focuses only on inflation is called monetarizing inflation.


Select one:


True

False
3.Excessive creation of new money to finance a government budget deficit can lead to


Select one:


a. disinflation.

b. deflation.

c. stagflation.

d. hyperinflation.
4.Suppose the government's initial debt is $400 billion. If for the next three years the government runs deficits of $150, $125, and $200 billion, the government's additional debt at the end of the three years will be


Select one:


a. -$50 billion.

b. $50 billion.

c. $475 billion.

d. $900 billion.
5.To measure the effect of debt in an economy, economists use a standard measure which involves the ________ relative to the GDP.


Select one:


a. stock market activity

b. outstanding government bonds

c. stock of debt

d. capital stock of equipment

Explanation / Answer

1)c. an individual who, regardless of income, is a large consumer. 2) TRUE 3)b. deflation. 4)c. $475 billion. 5d. capital stock of equipment

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