In which of the following situations is a budget surplus most likely to occur?
A. When fiscal policy is expansionary
B. When fiscal policy is expansionary and the economy is contracting
C. When the economy is contracting
D. When fiscal policy is contractionary and the economy is expanding
Answer: D
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Interest rates typically rise when
A) bond prices increase. B) bond prices decrease. C) the coupon payout on existing bonds increase. D) the maturity date on existing bonds extends farther into the future.
Which of the following is not generally considered to be a major cure for insolvency?
a. Equity infusions. b. Expansionary monetary policies. c. Financial restructuring. d. New management strategies. e. Asset liquidations.
Why is import substitution so popular as a development strategy in poor nations?
a. Domestic firms will be producing better products. b. It promotes free trade. c. It provides infant industries a protected market. d. It creates a competitive advantage for domestic firms.
This graph of negative externalities in production shows that the social costs of a negative externality are always ______ the private costs.
a. the inverse of
b. the same as
c. higher than
d. lower than