An increase in subsidies and other government spending during a recession is likely to result in
a. an increase in rent-seeking activity.
b. an increase in productive projects and a reduction in unproductive projects.
c. a decrease in the level of future taxes.
d. greater reliance on profits and losses in the allocation of resources.
A
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For a perfectly competitive firm, which of the following is NOT true?
A) The average revenue curve, the demand and the marginal revenue curves are identical. B) The total revenue curve begins at the origin and slopes upward as output increases. C) The slope of the total revenue curve is equal to the product price. D) The total revenue curve is horizontal.
Which is true of total federal spending relative to GDP?
a. It is the most commonly used measure of the size of government. b. There really is no upper limit to the ratio of total government spending to GDP. c. It has steadily increased over the last 50 years. d. All of the above are correct. e. Only a and c are correct.