The majority of payments made by the federal government are for
A. transfer payments.
B. administrative expenses.
C. foreign aid.
D. defense purchases.
Answer: A
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In the case of a negative externality, the government can use a ________________ to turn an inefficient outcome into an efficient one. In the case of a positive externality, the government can use a ________________ to turn an inefficient outcome into an efficient one.
A. tax; subsidy B. subsidy; tax C. tax; tax D. subsidy; subsidy
For a monopolist to earn a positive economic profit, price has to exceed average total cost at the level of output at which marginal revenue equals marginal cost
Indicate whether the statement is true or false
If the federal government runs a budget deficit, but the budget deficit as a percent of GDP is less than the growth rate of real output, the:
a. national debt will decrease as a share of GDP. b. national debt will remain a constant share of GDP. c. national debt will increase as a share of GDP. d. size of the national debt (in dollar value) will decline.
In the United States, monopoly regulation began primarily because:
a. there were no natural monopolies in the real world. b. the government wanted to promote other forms of business practices. c. monopolies did not typically follow occupational and safety rules. d. monopolies tended to restrict output and raise prices. e. most economists believed that the majority of industries were following the purely competitive model.