Starting from a balanced budget, which of the following would NOT cause a government budget deficit?
A) A decrease in taxes
B) An increase in spending of goods and services
C) An increase in transfer payments
D) A 50 percent increase in spending accompanied by a 50 percent increase in taxes
D
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Once a country has lost its comparative advantage in producing a good, its income will be ________ and its economy will be ________ if it switches from producing the good to importing it
A) higher; less efficient B) lower; less efficient C) higher; more efficient D) lower; more efficient
When profits exist in a competitive price-searcher market,
a. rival firms will be attracted into the market. b. high barriers to entry will prevent rival firms from entering the market. c. product differentiation will prevent new firms from making a profit. d. the profits will persist because the firms face a downward-sloping demand curve.