Rank the following state and local government expenditure categories from smallest to largest
a. education, health, highways
b. education, highways, health
c. highways, health, education
d. health, education, highways.
c
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If the government issues new government bonds to finance a budget deficit, the supply of loanable funds will ________ and the equilibrium amount of investment will ________
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
The new Keynesians believe that the economy is not always in equilibrium because:
a. of the existence of voluntary unemployment. b. the Federal Reserve policy is too restrictive. c. government intervention destabilizes the economy. d. of the existence of wage and price rigidities. e. the rate of inflation is too high.
Trade is based on
A. absolute advantage. B. comparative advantage. C. production costs. D. relative dollar prices.
If total revenue exceeds the total cost of production, a firm
A. suffers a loss. B. shuts down. C. earns a profit. D. breaks even.