Suppose the Canadian government's budget is G = $200 and T = $100 while the U.S. government's budget is G = $800 and T = $800 . We can conclude that
a. Canada has a deficit budget while the U.S. has a balanced budget and the Canadian budget is more expansionary than the U.S.'s
b. both budgets are balanced and the balanced budget multiplier in Canada is 0.5 while in the U.S. it is 0.8
c. Canada has a surplus budget while the U.S. has a balanced budget and the Canadian budget is more expansionary than the U.S.'s
d. Canada has a deficit budget while the U.S. has a balanced budget and the Canadian budget is less expansionary than the U.S.'s
e. Canada has a surplus budget while the U.S. has a balanced budget and the Canadian budget is less expansionary than the U.S.'s
A
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Explain why public choices might lead to the overprovision rather than the underprovision of a public good
What will be an ideal response?
An increase in the budget deficit
a. reduces investment because the interest rate rises. b. reduces investment because the interest rate falls. c. raises investment because the interest rate rises. d. raises investment because the interest rate falls.
The difference between the national debt and a federal budget deficit is
A) nothing; the national debt and the budget deficit are the same thing. B) the federal budget deficit represents the total amount of outstanding government debt while the national debt includes only the increase in the debt during the current year. C) the national debt represents the cumulative effect of all previous budget deficits and surpluses, while the federal budget deficit reflects only the additions to the debt during the current year. D) the national debt is financed primarily through government bonds, while the deficit is financed through taxes.
Table 7-2 This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke.
Buyer Willingness To Pay David $8.50 Laura $7.00 Megan $5.50 Mallory $4.00 Audrey $3.50 Refer to Table 7-2. If the market price is $3.80, a. David’s consumer surplus is $4.70 and total consumer surplus for the five individuals is $9.50. b. David, Laura, and Megan will be the only buyers of Vanilla Coke. c. Megan’s consumer surplus is $1.70 and total consumer surplus for the five individuals is $9.80. d. the demand curve for Vanilla Coke, taking the five individuals into account, is horizontal.