Differentiate between “off-budget” deficit and the “on-budget” deficit.
What will be an ideal response?
Social Security expenditures and the payroll tax receipts that finance them are treated as off-budget items. Because Social Security benefits are financed by an earmarked revenue source—the payroll tax—Social Security and a few minor items have traditionally been segregated in the federal fiscal accounts. Most other expenditures and receipts are classified as on-budget.
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Which of the following is likely in a monopolized market?
a. a price that exceeds marginal cost b. a price that exceeds marginal revenue c. a welfare loss due to the restriction of output d. all of the above
Where a free-rider problem exists, goods tend to be: a. underproduced
b. overproduced. c. high-priced and available only to the rich. d. low priced and available only to the poor.
Which statement is true?
A. Most firms in the United States are oligopolies. B. Oligopoly is illegal in the United States. C. Product differentiation is the most important characteristic of oligopoly. D. Big business or industry in the United States typically refers to oligopolies.
In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices. B. lower prices. C. lower output. D. None of these is true.