If the government increased defense spending by $1 million and laid off enough Justice Department employees to decrease the Department of Justice budget by $1 million, which of the following is the likely net effect?
a. An increase in the budget deficit and transfer payments
b. An increase in the budget deficit and net taxes
c. An increase in the budget deficit and government spending
d. No change in the budget deficit because there is no net change in government spending
e. No change in the budget deficit because neither defense spending nor the Department of Justice is included in government spending
d
You might also like to view...
Refer to the figure above. If the monopolist faces a constant marginal cost of $10, at what price should it sell its output?
A) $2 B) $10 C) $12 D) $14
Suppose you are on a committee seeking to increase revenue from your city's bus system. If demand is _______, you would recommend raising the fare
a. perfectly elastic b. elastic c. unitary elastic d. inelastic