46. "Budget deficits are sometimes useful to spur consumption and thus encourage investment in business plant and equipment, but more generally they discourage rather than encourage investment because they ....." This clipping is best completed with

a) create inflation b) raise interest rates

c) lower interest rates d) decrease aggregate demand

47. High savings rates have been a hallmark of Asias economic development, helping the regions economies _______. Now they have come to be seen as a handicap because _______. The best way to fill these blanks is

finance investment; the fall in aggregate demand worsens the recession

finance investment; this creates inflation

avoid inflation; the fall in aggregate demand worsens the recession

avoid inflation; this creates inflation

48. One theory as to why productivity in Canada and Europe does not adjust to recessions as robustly as the United States is that the U.S. market is inherently more flexible. Its labor laws and work force practices This statement is best completed with

protect workers from being laid off

allow workers to be laid off easily

fix wages for workers

force workers to belong to unions