Suppose that the federal government had a budget deficit of $80 billion in year 1 and $90 billion in year 2, but that it experiences budget surpluses of $40 billion in year 3 and $20 billion in year 4
Also assume that the government uses any budget surpluses to pay down the public debt. At the end of these four years, the Federal government's public debt would have
A) increased by $110 billion. B) decreased by $57.5 billion.
C) increased by $230 billion. D) decreased by $110 billion.
A
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Both Mergatroid and the Geebocks produce only gizmos and widgets. It is possible for Mergatroid to have
A) an absolute and a comparative advantage in both products. B) an absolute but not a comparative advantage in both products. C) a comparative but not an absolute advantage in both products. D) neither a comparative nor an absolute advantage in both products.
Regulation is guaranteed to be more efficient than a monopoly
A) True, the government is able to internalize the dead weight loss of the monopoly. B) True, the consumers are better off if government provides the product rather than a private firm. C) False, the government does not always have sufficient information to provide a more efficient market outcome. D) False, the consumers are worse off under government regulation.
Suppose the demand for nachos increases. What will happen to producer surplus in the market for nachos?
a. It increases. b. It decreases. c. It remains unchanged. d. It may increase, decrease, or remain unchanged.
Pollution from a privately owned factory that seriously harms a privately owned forest will, if property rights are strongly protected,
a. not result in penalties to the polluter, who has a right to use his property as he wishes. b. make the polluter liable for any damages done to the forest. c. be ignored under the law, in favor of the polluting factory owner. d. never occur.