If a local government collects taxes of $500,000, has $350,000 of government consumption expenditures, makes transfer payments of $100,000, and has no interest payments or investment, its budget would
A) show a surplus of $150,000.
B) show a surplus of $50,000.
C) be in balance with neither a surplus nor a deficit.
D) show a deficit of $50,000.
B
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If the expenditures multiplier in an economy is 3 and the government wants to increase aggregate demand by $12 billion at all price levels, it should cut taxes by
A. $9 billion. B. $12 billion. C. $6 billion. D. $3 billion.
Define each of the symbols and explain the meaning of M V = P Y
The reason why the AS/AD model does not depend upon the concepts of substitution and opportunity cost is that:
A. the AS/AD model considers the effects of other countries' decisions. B. in groups, people do not make the same choices as when they are alone. C. the AS/AD model considers total output. There are no goods to substitute. D. other things remain constant in the AS/AD model.
If you have flipped a fair coin and tails has come up 49 times in a row, what are the odds that the next flip will be a head?
A) 1/50 B) 1/25 C) 1/2 D) 1 (100%)