In the market clearing model without government borrowing, the net effect of government on households is an increase in funds of:

a. transfer payments times taxes.
b. taxes less transfer payments.
c. transfer payments plus taxes.
d. transfer payments less taxes.


Answer: d. transfer payments less taxes.

Economics

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Economics

Data for an economy show that the unemployment rate is 6 percent, the participation rate 60 percent, and 200 million people 16 years or older are not in the labor force. How many people are unemployed this economy?

A. 12.0 million B. 28.8 million C. 18.0 million D. 43.2 million

Economics

Assume the graph shown represents the market for pizzas sold in an hour. If the original equilibrium was D and S1. Which of the following is true when S1 shifted to S2?

A. Equilibrium price increased by $5. B. Equilibrium quantity increased by 20. C. Equilibrium quantity increased by 30. D. Equilibrium price decreased by $5.

Economics

Use the following list to answer the question about the money supply.

Items 1. Money market mutual funds held by individuals 2. Savings deposits, including money market deposit accounts 3. Money market mutual funds held by businesses 4. Currency held by the public 5. Small time deposits 6. Checkable deposits Refer to the list above. The M2 money supply is composed of items: A. 1, 2, 3, 4, 5, and 6 B. 1, 2, 4, 5, and 6 C. 1, 2, 4, and 6 D. 2, 4, 5, and 6

Economics