Suppose that the economy has a structural deficit of $200 billion and is also running a budget deficit. It follows that:
A. there is a cyclical surplus.
B. there is a cyclical deficit.
C. there is no cyclical deficit or surplus.
D. the cyclical deficit or surplus cannot be determined without more information.
Answer: D
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Use the following graph for a competitive market to answer the question below.
Assume the government imposes a $3 tax on buyers, which results in a shift of the demand curve from D1 to D2. The amount of the tax paid by the consumer is
A. $8. B. $1. C. $3. D. $2.
A perfect price discriminator
A) charges the maximum price for each unit that consumers are willing to pay. B) is able to convince consumers to pay more for each unit than they are willing to pay. C) is unable to make an economic profit. D) disregards the market demand curve.
Gross domestic product calculations count only final goods and services because:
A. these are the only goods and services that are purchased in an economy. B. counting all goods and services would lead to double-counting of many activities. C. it is difficult to measure the prices of intermediate goods produced. D. one cannot calculate the quantities of intermediate goods produced.
Suppose output is $1000 billion, government purchases are $200 billion, desired consumption is $700 billion, and desired investment is $150 billion. Net foreign lending would be equal to
A. $50 billion. B. $150 billion. C. -$50 billion. D. -$150 billion.