Exam 17: Macroeconomic Policy Debates

Critics of inflation targeting worry that if the Fed focuses only in fighting inflation:

The proposition that states that whether government finances its deficit by borrowing or by increasing taxes is irrelevant was named after:

If the Fed follows a policy of targeting the inflation rate:

Tax changes that favor people who save will also tend to favor those with relatively higher incomes.

Which of the following events is expected to worsen the budget deficit in the years following 2008?

Federal government debt as a percentage of GDP:

What is Ricardian equivalence?

In the late 1990s, the United States had:

Suppose that the natural rate of unemployment is 4% and the current inflation rate is 2% per year. To bring the inflation rate down to zero, the actual unemployment rate in the economy would have to be:

The proposition that states that whether government finances its deficit by borrowing or by increasing taxes is irrelevant is called:

Printing money to finance budget deficits ultimately leads to:

Recall Application 1, "New Methods to Measure the Long-Term Fiscal Imbalances for the United States," to answer the following questions: -According to the application, a government policy that increases Medicare coverage and benefits will cause:

Why are policies that give tax breaks to saving likely to be harder on the poor rather than the rich?

In the United States, corporate profits are taxed twice.

List two arguments against the passage of a balanced budget amendment.

Which of the following ways does the federal government finance its expenditures?

Which of the following is a correct sequence of events during an expansion?

When the federal government runs a budget deficit, it is possible for current taxpayers to pass the tax burden to future generations.

If the government is required to balance the budget and the economy is in a recession and experiencing an expanding budget deficit, the government must:

What is the difference between inflation targeting and the alternative developed by John Taylor of Stanford University?