When the federal government is running a budget deficit:
A. government tax revenues exceed government expenditures.
B. government expenditures exceed government tax revenues.
C. the economy must be in an economic recession.
D. the size of the national debt will decline.
Answer: B
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Which of the following fiscal policy actions would be appropriate if the economy is experiencing an recessionary? gap?
A. a decrease in taxes B. an increase in interest rates C. a decrease in government spending D. a decrease in the money supply
Nonsmoking sections in restaurants are designed to remove ____ from a market ____
a. smoke; with food service b. third parties; for food service c. externalities; with public goods d. third parties; externality e. nonsmokers; for food service
Public goods
A) are products supplied by the government. B) are consumed by everyone when one person consumes them. C) are efficiently produced by profit-seeking firms. D) are freely traded on a market.
Tom carries on loud cellphone conversations in public places. He values such conversations at $1 per minute. Steve prefers piece and quiet. He would pay $2 per minute to avoid overhearing Tom's conversations. In this situation
a. Tom should quit using his cellphone because that would be a Pareto improvement b. Tom should quit using his cellphone because that would be efficient c. If Steve made a side payment of $3 to Tom, that would be a Pareto improvement d. If Steve paid Tom 50 cents per minute to quit talking, that would be a Pareto improvement e. If Steve paid Tom $1.50 per minute to quit talking, that would be a Pareto improvement