In the long run, large and continuing budget surpluses
a. mean higher taxes and a lower standard of living
b. mean a larger money supply and higher interest rates
c. are a problem because they crowd out private spending
d. permit the government to lower taxes, thereby encouraging work, investment, and saving
e. mean a larger money supply and lower interest rates
D
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Lee earns more than does Pat. Which of the following can explain why?
A) Pat is discriminated against. B) Lee has more human capital. C) Lee has a greater degree of specialization in earning an income. D) All of the above could be a factor leading to the wage difference.
To achieve the optimal provision of public goods,
a. the market should be allowed to find its equilibrium without government interference b. the government must limit the provision of these goods c. the government must levy taxes on producers of these goods d. the government must either provide the goods at prices different from those established on the market, or subsidize the production of those who provide thegoods e. a tax must be imposed on consumers equal to the negative externality