The structural deficit or surplus
A. shows the government where to make cuts in expenditures to follow the balanced budget requirement.
B. reveals the complicated structure underlying government spending and tax policy.
C. is the hypothetical deficit or surplus under current fiscal policies if the economy were operating near full employment.
D. includes all government budgets-federal, state, and local.
Answer: C
You might also like to view...
When the nominal interest rate falls, there is
A) a leftward shift of the demand for money curve. B) a downward movement along the demand for money curve. C) no movement along the demand for money curve and the curve does not shift. D) a rightward shift of the demand for money curve. E) an upward movement along the demand for money curve.
Suppose the daily demand for Coke and Pepsi in a small city are given by QC = 90 - 100PC + 400(PP - PC) and QP = 90 - 100PP + 400(PC - PP), where QC and QP are the number of cans Coke and Pepsi sell, respectively, in thousands per day. PC and PP are the prices of a can of Coke and Pepsi, respectively, measured in dollars. The marginal cost is $0.45 per can for both Coke and Pepsi. What is Pepsi's best response function?
A. QP = 200PC - 67.5 B. QP = (90 + 400PC) - 500PP C. PP = 0.315 + 0.4PC D. PP = (0.18 + 0.8PC) - 0.002QP
Purchasing power parity exists when domestic currency:
a. maintains a fixed exchange rate with foreign currency. b. is not convertible into foreign currency. c. buys more goods at home than abroad. d. buys as many goods at home as it does abroad. e. appreciates in value against foreign currency.
A pure monopolist is selling six units at a price of $12. If the marginal revenue of the seventh unit is $5, then the:
A. price of the seventh unit is $10. B. price of the seventh unit is $11. C. price of the seventh unit is greater than $12. D. firm's demand curve is perfectly elastic.