Assuming no government or foreign sector, [1 / MPS] represents

Price controls will tend to cause misallocation of resources because

a. production (or opportunity) cost no longer corresponds to market price. b. people are unable to determine their preferences at the high or low price. c. producers no longer have incentive to be profitable. d. consumers no longer have incentive to spend their income efficiently.

The following is budget information for a hypothetical economy. All data are in billions of dollars.

Refer to the above table. The budget deficit was $75 billion in:


A. Year 2

B. Year 3

C. Year 4

D. Year 5