A budget deficit is best defined as the
A. shortage of spending power created by a government spending cut.
B. shortage of spending power created by a tax increase.
C. accumulation of past debt that has not been covered by taxes.
D. amount by which a government’s expenditures exceed receipts during a specific time period.
Answer: D
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The cost of lobbying for an import quota in a perfectly competitive market
A) increases the welfare loss of the quota. B) decreases the deadweight loss of the quota. C) shifts the supply curve of the good to the left. D) increases the consumer surplus.
Suppose that in a month the price of oranges increases from $.75 to $1. At the same time, the quantity of oranges demanded decreases from 100 to 80. The price elasticity of demand for oranges (calculated using the initial value formula) is:
A. 0.75. B. 0.6. C. 0.25. D. 20.
Refer to the above figure. Which point represents the second highest level of utility?
A. Point A B. Point B C. Point C D. Point D
To make the calculation of real GDP more accurate, in 1996 the BEA switched to using
A) base-year prices. B) current prices. C) chain-weighted prices. D) market prices.