If a government spends $20 billion on new bridges that have an expected life of 20 years, the expenditures would:
a. Increase government spending and government expenses by the full $20 billion even though a business would expense them over the 20-year period.
b. Not change government spending and therefore would not change the government deficit because they are capital expenditures.
c. Increase total government spending by the full amount (i.e., $20 billion), but only $1 billion of it would be considered part of the budget deficit because the $20 billion is amortized over the 20 years.
d. Initially increase the budget deficit by an amount equal to $20 billion, but only $1 billion of it would be considered part of the government spending because the $20 billion is amortized over the 20 years.
.A
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In the figure above, imposing a tax on the product results in a division in which
A) all of the tax is paid by the buyers. B) all of the tax is paid by the sellers. C) the buyers and sellers pay the same amount. D) neither the buyers nor the sellers pay the tax.
The typical firm in many industries has become ________ over the past 100 years, and efficiently organizing production has become ________
A) larger; easier B) larger; more difficult C) smaller; easier D) smaller; more difficult
The cross-price elasticity of demand of products "M" and "N" is zero. This implies that "M" and "N" are
A) substitute products. B) complementary products. C) independent products. D) unique goods, as the price elasticity of demand for one of them is zero.
Which of the following events occurred during the 2000 to 2005 time-frame and had an important impact on the deficit/surplus projections?
A. The steep decline in taxable capital gains that resulted from declines in the Stock Market from March 2000 to the end of 2002 B. The decrease in unemployment rates from 2002 to 2003 C. The increase in interest rates from 2001 to 2003 D. The increase in inflation rates from 2000 to 2002