What is the trade off in the extraction of nonrenewable resources?
What will be an ideal response?
Nonrenewable resources include oil, coal, and other resources that must be pumped or mined from the ground. A company has the goal of maximizing profits, but this involves maximizing the stream of profits over the extraction period. Every bit of a nonrenewable natural resource that is extracted and sold today has a user cost in the form of not being extracted and sold in the future. The basic tradeoff is that current extraction and use means lower future extraction and use.
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As Figure 10.5 shows, government receipts and outlays tend to fluctuate over time. For example, beginning in 2007, when the economy stagnated as a consequence of the financial crisis, government receipts declined while outlays increased
What will be an ideal response?
When you buy a United States Savings Bond, you
a. loan money to the government b. borrow money from a savings and loan association c. donate money for special government projects d. pay for your childs college education