The majority of federal expenditures is spent on
A. Public sector purchases of goods and services.
B. National Defense.
C. Private sector purchases of goods and services.
D. Income transfers.
Answer: D
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When a government has a large budget deficit, it must issue government bonds to finance the deficit. Explain if it matters for the rate of inflation if the government sells the bonds to the public or sells the bonds to the central bank?
What will be an ideal response?
Assume that a firm's marginal revenue curve intersects the rising portion of the marginal cost curve at 100 units of output. At this output level, the profit-maximizing firm's total fixed cost is $600 and its total variable cost is $400 . If the price of the product is $8 per unit, the firm should produce:
a. zero units of output. b. less than 100 units of output. c. 100 units of output. d. more than 100 units of output. e. 200 units of the output.
The efficiency of the payments' mechanism affects
a. the speed with which money can be exchanged for other assets. b. how quickly individual loan applications will be approved. c. how slowly individuals deplete their cash balances. d. the speed with which financial institutions can process checks and other funds.
Deadweight losses arise because a tax causes some individuals to change their behavior
a. True b. False Indicate whether the statement is true or false