Identify the incorrect statement about the U.S. federal deficit.
a. The U.S. is now the world's leading creditor.
b. The U.S. borrows huge sums from abroad.
c. Some critics blame U.S. fiscal policy as reflected in the large federal deficits for the switch of the U.S. from creditor to debtor nation.
d. Japan and China are big buyers of U.S. Treasury securities.
e. The federal budget, on an average, had a deficit of 3.0 percent relative to GDP.
QUESTION 2Cost-push inflation:
a. occurs when the aggregate demand curve shifts rightward.
b. occurs when the aggregate supply curve shifts rightward.
c. results in a decrease in the unemployment rate.
d. results in a movement along the aggregate demand curve.
e. is caused by the same factors that lead to demand-pull inflation.
QUESTION 3Food stamps and Medicaid are in-kind transfer programs.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 4The key link between the twin deficits involves:
a. higher interest rates and a stronger dollar.
b. lower interest rates and a stronger dollar.
c. higher interest rates and a weaker dollar.
d. lower interest rates and larger trade deficits
e. higher interest rates leading to more exports.
QUESTION 5Inflation can be caused:
a. only by increases in aggregate demand.
b. only by increases in aggregate supply.
c. only by decreases in aggregate supply.
d. by increases in aggregate supply or decreases in aggregate demand.
e. by increases in aggregate demand or decreases in aggregate supply.
QUESTION 6Almost all of the FICA tax deductions from a worker's paycheck is put into an account and saved for that worker's retirement years.
a. True
b. False
Indicate whether the statement is true or false
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