Question Details

This behavior causes the multiplier to become 



1. An increase in our borrowing from foreigners 
a) is usually caused by a fall in our interest rate 
b) is unquestionably a burden on future generations 
c) happens when our bond prices are relatively high 
d) lets current-generation citizens obtain more than full-employment output 
2. “Research suggests that when the ratio of public debt to GDP is high, the multiplier effect of fiscal stimulus is low.” The logic here is that 
	the government can’t increase government spending by very much 
	people don’t spend because they are worried about paying future taxes 
	the statement is wrong - fiscal stimulus via lower taxes is strong 
	the statement is wrong - the multiplier should be high 

3. ”Last year U.S. taxpayers saved virtually all the money they got through a federal tax cut. And the recent (2008-9) spike in the personal savings rate supports Ricardo- theory.” This behavior causes the multiplier to become 
	bigger b) smaller c) unreliable d) no change 

4. ”Their reluctance to spend, according to Ricardo, stems from a lack of faith in the government- ability to manage stimulus, and a belief that they will eventually be hit by ……” This clipping is best completed with 
	higher interest rates 
	higher taxes 
	lower government spending 
	foreign borrowing 

5. ”Named after the writings of David Ricardo in the early 1820s, the theory suggests that stimulus spending is doomed to failure because …….” 
This clipping is best completed with 
	the stimulus dollars are saved, not spent 
	of the way the stimulus spending is financed 
	the stimulus should have been through lower taxes 
	it is invariably spent on the wrong things. 



Economics Assignment Help, Economics Homework help, Economics Study Help, Economics Course Help