The term “fiscal federalism” refers to
A. deficit financing of government programs.
B. the power of Congress to tax and to determine how tax revenues are spent.
C. transferring money between levels of government (for example, from a state government to a local government).
D. the system under which governments ask citizens to vote on major revenue-raising measures (for example, on issues of municipal bonds).
Answer: C
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Both the permanent-income and life-cycle hypotheses modify Keynesian consumption theory by distinguishing the effects of
A) temporary and permanent changes in disposable income. B) changes in the disposable income of upper income and lower income classes. C) changes in labor income and interest income. D) small and large changes in disposable income.
When a perfectly competitive firm finds that its market price is below its minimum average variable cost, it will sell
A) the output where marginal revenue equals marginal cost. B) any positive output the entrepreneur decides upon because all of it can be sold. C) nothing at all; the firm shuts down. D) the output where average total cost equals price.