If the federal government's expenditures are less than its tax revenues, then
A) the budget is balanced.
B) a budget surplus results.
C) a budget deficit results.
D) No conclusion can be drawn here regarding the budget surplus or deficit without information regarding government purchases versus other outlays.
B
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Explain why some amount of ignorance can be rational
What will be an ideal response?
Imagine Tom's annual salary as an assistant store manager is $30,000, he owns a building that rents for $10,000 yearly, and his financial assets generate $1,000 per year in interest. One day, after deciding to be his own boss, he quits his job, evicts his tenants, and uses his financial assets to establish a bicycle repair shop. To run the business, he outlays $15,000 in cash to cover all the costs involved with running the business, and earns revenues of $50,000. What are Tom's accounting profits?
A. $50,000 B. $24,000 C. $35,000 D. $6,000
If the income elasticity for lobster is 0.6, a 25 percent increase in income will lead to a:
A. 15 percent increase in demand for lobster. B. 2.4 percent increase in demand for lobster. C. 6 percent drop in demand for lobster. D. 42 percent increase in demand for lobster.
If a hurricane were to wipe out the majority of the eastern seaboard in the United States:
A. neither the short-run nor long-run aggregate supply curves would be affected. B. only the long-run aggregate supply curve would shift left. C. only the short-run aggregate supply curve would shift left. D. the long-run and short-run aggregate supply curves would both shift left.