Suppose the federal budget deficit for the year was $100 billion and the economy was in a recession. If the economy had been at potential GDP, it is estimated that tax revenues would have been $60 billion higher and government spending on transfer
payments $50 billion lower. Using these estimates, the cyclically adjusted budget
A) deficit was $210 billion.
B) deficit was $110 billion.
C) surplus was $10 billion.
D) surplus was $110 billion.
Answer: C
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Which of the following is true?
A) The market demand curve for a public good has a positive slope. B) The market demand curve for a private good has a positive slope. C) The market demand curve for a public good is arrived at by the horizontal sum of individual demand curves. D) The market demand curve for a public good is arrived at by the vertical sum of individual demand curves.
If an industry evolves from monopolistic competition to oligopoly, we would expect:
A. the four-firm concentration ratio to decrease. B. the four-firm concentration ratio to increase. C. the four-firm concentration ratio to remain the same. D. barriers to entry to weaken.