A budget surplus
a. occurs when the government has debt equal to zero.
b. causes government debt to increase.
c. exists when government spending is greater than tax revenues.
d. reduces the government's debt.
d
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Gift shops in a small town sell identical mugs to tourists. However, tourists don't have enough time to check out the prices one by one and don't have brochures listing prices of mugs. We can conclude
A) the market for mugs is perfectly competitive. B) buyers have full information. C) sellers are price takers. D) the market is not perfectly competitive.
According to purchasing-power parity, if a basket of goods costs $100 in the U.S. and the same basket costs 800 pesos in Argentina, then what is the nominal exchange rate?
a. 8 pesos per dollar b. 1 peso per dollar c. 1/8 peso per dollar d. none of the above is correct