What are the three sources of funding for the public sector? Can the government rely on all of these sources in the long run? Explain
What will be an ideal response?
The three sources are (1 ) explicit user fees for government goods and services, (2 ) taxes, and (3 ) borrowing. Because the government cannot borrow forever so that, in the long run, its major sources of revenue are only user fees and taxes.
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The figure above shows Clara's demand for CDs. If the price for a CD is $15, then Clara
A) receives no consumer surplus on the 6th CD she buys. B) receives a total of $10 of consumer surplus. C) will buy no CDs. D) receives a total of $40 of consumer surplus.
In Macroland, currency held by the public is 2,000 econs, bank reserves are 300 econs, and the required reserve/deposit ratio is 10 percent. If the Central Bank raises the required reserve/deposit ratio making the new desired ratio equal to 15 percent, then the money supply in Macroland will ________ to ________ econs, assuming that the public does not wish to change the amount of currency it holds.
A. decrease; 5,000 B. increase; 4,000 C. decrease; 4,000 D. increase; 5,000
Refer to the given figure.
________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________.
A. Rising; A; C B. Falling; A; B C. Falling; A; C D. Rising; B; C
If the price level falls as real GDP decreases, the multiplier effects of any given change in aggregate expenditures are smaller than they would be if the price level remained constant
a. True b. False Indicate whether the statement is true or false