Use the graph below to show the effect of a discretionary increase in government spending. Assume the economy is currently in an expansionary period. Discuss how this effects the federal budget.
If the government increases discretionary spending the government spending curve will shift upward by the amount of the increase. We initially assumed the economy was an expansionary period. Meaning the economy was to the right of GDP0, and there was a budget surplus. The increase in government spending will reduce the amount of the surplus. The amount by which it will decrease depends on the size of the budget surplus (the level of GDP) and the size of the increase in spending. Suppose the economy was operating at GDP1, the budget will move from a surplus to a deficit. If instead the economy was at GDP2, the budget surplus will remain, but it will be smaller.
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Tests used to rate the performance of rules developed in technical analysis conclude that technical analysis
A) outperforms the overall market. B) far outperforms the overall market, suggesting that stockbrokers provide valuable services. C) does not outperform the overall market. D) does not outperform the overall market, suggesting that stockbrokers do not provide services of any value.
Refer to the above table. What is the marginal factor cost when the firm employs the second unit of labor?
A) $19
B) $21
C) $36
D) $38
A private good is:
a. excludable and nonrival. b. nonexcludable and rival. c. nonexcludable and nonrival. d. excludable and rival.
A group of legislators agree to vote for a package of otherwise unrelated laws that they individually favor. Which term describes this activity?
a. Pork-barrel spending b. Logrolling c. Political correctness d. Lobbying