The sum of public spending on goods and services and transfer payments during a given period cannot exceed tax revenues plus borrowed funds. This is the statement for
A) ad valorem taxation.
B) an excise tax.
C) a sales tax.
D) the government budget constraint.
D
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If a given fiscal policy is fully accommodated by monetary policy, then
A) GDP will remain constant. B) the interest rate will remain constant. C) GDP and the interest rate will move in the same direction. D) GDP and the interest rate will move in the opposite direction.
A realistic production possibilities curve:
A. is concave while a simple PPF has constant opportunity costs. B. is straight lined while a simple PPFhas constant opportunity costs. C. is straight lined while a simple PPF is bowed outward. D. is concave while a simple PPFhas increasing opportunity costs.
The law of increasing opportunity cost explains why the shape of the production possibilities curve is:
A. a straight line parallel to the horizontal axis. B. bowed inward (convex) to the origin of the graph. C. a straight line from one axis to the other. D. bowed out (concave) from the origin of the graph.
The natural monopoly in Figure 13.3 wants to produce:
A. Q1. B. Q2. C. Q3. D. Q4.