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.
Answer: D
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If the opportunity cost of producing extra units of one good (expressed in terms of the amount of another good given up) remains constant, then the shape of the production possibilities frontier is
A. a vertical line. B. an upward-sloping line. C. a straight horizontal line. D. a straight downward-sloping line.
How did Keynes propose to solve the problem of high unemployment?
A) Increase the growth rate of the money supply. B) Allow wages to decline, so that firms will want to hire more workers. C) Put on wage and price controls, so wages won't rise and firms won't have to lay people off to cut costs. D) Have the government increase its demand for goods and services.
Which of the following is a positive economic statement?
a. Government control of rent is a fair way to help poor people afford housing. b. Government control of rent keeps landlords from charging too much rent. c. Government control of rent decreases the number of new apartments constructed. d. Government control of rent is an injustice.
Suppose that Figure 7.4 shows a monopolist's demand curve, marginal revenue, and its costs. The monopolist would maximize its profit by producing a quantity of:
A. 30 units. B. 50 units. C. 60 units. D. There is not sufficient information.