A deficit is defined as
A) the excess of total revenues over total expenditures.
B) the sum of all past borrowing by the government.
C) the excess of total expenditures over total revenues.
D) government spending plus transfer payments.
C
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Which of the following will be included in the income-based method of national accounting?
A) A firm's expenditure on raw materials B) A student's expenditure on education C) A consumer's expenditure on a imported car D) A worker's retirement benefits
In the figure below, we see an expansion of the production-possibility curve (from PPC1 to PPC2). The two goods produced are wheat and cloth, which are land-intensive and labor-intensive, respectively. The outward shift of the production-possibility curve is likely the result of
A. a fall in the average cost of producing cloth. B. an increase in the national amount of usable land, the size of the labor force remaining unchanged. C. an increase in the size of the labor force, the area under cultivation remaining unchanged. D. an increase in the price of cloth.
The assumption that individuals do NOT intentionally make decisions that would leave them worse off is referred to as
A) the premium assumption. B) the law of comparative advantage. C) the rationality assumption. D) a ceteris paribus assumption.
If the value of the cross elasticity of demand is negative, the two goods are
A. complementary goods. B. inferior goods. C. substitute goods. D. normal goods.