If government increased Social Security benefits and decreased the salaries of government workers by the same amount, which of the following is the expected immediate effect?
a. An increase in the budget deficit and government purchases of goods and services
b. An increase in the budget deficit, but no change in government purchases of goods and services.
c. An increase in the budget deficit and a decrease in government purchases of goods and services.
d. No change in the budget deficit because there has been no change in government purchases of goods and services.
e. No change in the budget deficit because government purchases of goods and services have decreased by the same amount as transfer payments have increased.
e
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In the above figure, curve D slopes downward because
A) average fixed costs decrease as output increases. B) all costs decrease as output increases. C) there are diminishing returns. D) there are decreasing marginal costs.
A disadvantage of the corporate form of business organization is
A) double taxation. B) limited access to capital. C) that the corporation can only do business in the state where it was incorporated. D) unlimited liability for shareholders.
A debt that rises faster than nominal GDP will impose the following opportunity costs in the future:
a. A permanently higher tax burden. b. A period of inflation. c. Reduced government outlays relative to GDP d. Higher taxes relative to GDP. e. All of the above.
Marginal means _____.
A) Additional B) unimportant. C) level or size. D) scarcity. E) inferior.