The government collects tax revenues of $100 million and has $105 million in outlays. The budget balance is a
A) deficit of $5 million.
B) surplus of $5 million.
C) surplus of $100 million and a deficit of $105 million.
D) deficit of $105 million.
E) surplus of $105 million.
A
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According to classical economists, the government should increase government purchases when
A) the benefits of the spending exceed the costs. B) the economy is in a recession. C) the economy is likely to go into a recession in the next six months to a year. D) inflation is lower than its targeted level.
Simple majority voting sometimes leads to projects being undertaken whose costs are greater than the benefits. How is this possible?
A) It is not possible, unless the voting results are rigged. B) Because voters have no way to express the intensity of their preferences. C) Because many voters choose to be rationally ignorant. D) Because free riding is pervasive.
According to Keynesian economics, what impact would a balanced budget amendment to our constitution have on our national economy?
What will be an ideal response?
Your roommate has the right to play her harmonica during the day. But you find the best time to study is during the day, and the harmonica playing makes it hard for you to concentrate. You tell your roommate that you will do her laundry every week if she does not play the harmonica during the day and she agrees to this. This is an example of
A. the Coase theorem. B. liability rules. C. the drop-in-the-bucket problem. D. an injunction.