The federal government's budget includes spending on goods and services, transfer payments, and taxes. (This is also true of state and local government budgets, but our focus for purposes of fiscal policy analysis is mainly the federal budget.)
What will be an ideal response?
Thus we can divide total
government expenditures, or government outlays, into two categories. Total government
outlays include not only government spending on goods and services (G) but also government transfer payments:
Government Outlays = G + TR
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Which of the following would be most likely to shift a country's production possibilities curve outward?
a. An improvement in the general level of literacy and education b. A sudden, substantial expansion of consumer wants. c. A reduction in the country's labor force or population. d. Shifting resources from investment to consumption goods production.
If you advertise and your rival advertises, you each will earn $4 million in profits. If neither of you advertises, you will each earn $10 million in profits. However, if one of you advertises and the other does not, the firm that advertises will earn $1 million and the non-advertising firm will earn $5 million. If you and your rival plan to be in business for 10 years, then the Nash equilibrium is:
A. for each firm to advertise every year. B. for neither firm to advertise in early years, but to advertise in later years. C. for each firm to advertise in early years, but not advertise in later years. D. for each firm to not advertise in any year.