Which of the following is true of an annually balanced federal budget?
a. Most economists agree that the federal government should balance its budget just as each household does.
b. Such a policy would require the government to increase its spending when tax receipts decrease
c. Such a policy became popular between the 1930s and 1960s.
d. Such a policy guarantees that the economy is its potential level.
e. Such a policy could worsen a contractionary gap.
e
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Suppose an industry is composed of 10 firms. Each firm's share of total sales in the industry is 10 percent. If two of the firms merge, then the four-firm concentration ratio in the industry will
A) remain unchanged. B) decrease as there are fewer firms in the industry. C) increase. D) depend on the market condition faced by the industry.
Developing countries often justify imposition of tariffs because:
a. it creates a burden on government budget. b. it is easy to collect direct taxes from people in the developing countries. c. a large number of people in the developing countries earn a taxable income. d. developing countries find income taxes difficult to levy and collect. e. the volume of imports of these countries is considerably low.