In recessions, we expect to run federal budget ___ bc govt spending will be ____ tax revenues.
a. balances; equal to
b. surpluses; greater than
c. surpluses; smaller than
d. deficits; greater than
e. deficits; smaller than
Answer: d. deficits; greater than
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Use the following graph of demand curves to answer the next question. 
For a given change in supply, which demand curve is going to yield the largest change in quantity demanded?
A. D1 B. D3 C. D4 D. D5
If the opportunity cost of producing more of one good increases as more of that good is produced, then the production method is inefficient
Indicate whether the statement is true or false
If at a price of $10, a vendor sells 5 units of a product and at a price of $8, 6 units are sold, then, using the midpoint formula, the demand for this good is inelastic
Indicate whether the statement is true or false
In a two-period model, government spending is financed through
A) taxes and transfer payments. B) taxes and issuing debt. C) taxes and redeeming debt. D) taxes only.