If someone told you that France's government budget was similar to the U.S. budget, you would know that the highest category of government spending in France is for
a. national security
b. net interest payments on the national debt
c. income support, Social Security, and welfare
d. veterans' benefits
e. transportation
C
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One of the ugly stepsisters argues that she, rather than Cinderella, should go to the ball because she will derive more utility from it than Cinderella. An economist would: a. agree, since the ugly stepsister's reasoning is sound
b. want to know how much utility each will receive from attending the ball in order to determine which woman should attend. c. point out that making interpersonal utility comparisons is not possible. d. ask how many balls each woman has attended in order to calculate the marginal utility that each would derive from attending, and then decide who should go to the ball.
What is the term referring to the situation when a central bank makes short-term loans available in situations of severe financial panic or stress?
a. deposit insurance b. lender of last resort c. reserve insurance d. Fed loans