When government outlays are less than tax revenues, the government has
A) a budget with a negative debt.
B) a budget deficit.
C) a budget with a positive balance.
D) an illegal budget because outlays must exceed tax revenues.
E) a budget surplus.
E
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The demonstration effect suggests that people will save less when they
A. control their spending in order to save more when the real interest rate increases. B. recognize that the real interest rate has increased. C. base their spending decisions (and consequently their saving decisions) on spending decisions of others who spend more than they do. D. base their saving decisions on their projections of income and spending needs over their lifetime.
Shaniq consumes only magazine and CDs. Her income equals $60 per month. CDs are $12 each and magazines are $5 each. What is the equation for her budget line?
A) $60 = Qm + QCD B) $60 = $12Qm + $5QCD C) 12 = -2Qm + 6 D) $60 = 12QCD + 5Qm
Reductions in private spending as a result of increased government spending or the need to finance a budget deficit is called
A) pushing in. B) rushing forth. C) crowding in. D) crowding out.
For which of the following goods and services are prices most sticky?
A. Taxi fares. B. Beer. C. Coin-operated laundry machines. D. Airline tickets.