Discretionary Spending Is a Shrinking Part of the Federal Budget

question 60

Multiple Choice

Discretionary spending is a shrinking part of the federal budget.What is a possible consequence to this development?

• A) Politicians will have more control over spending,increasing favoritism and corruption in Congress.
• B) Income assistance programs will eventually have revenue shortfalls and be unable to fulfill their obligations.
• C) There will be more competition for public works and infrastructure projects.
• D) The federal government will be forced to lapse on interest payments,reducing the overall creditworthiness of the United States.
• E) State and local governments will eventually assume discretionary spending responsibilities.

---

Definitions:

Kinked Demand Curve

A theory in economics that suggests that prices in a monopolistic competition scenario may remain stable because competitors will match price decreases but not price increases.

Price

The amount of money expected, required, or given in exchange for something.

Kinked Demand

A demand curve that has a distinct bend or "kink," often used to describe oligopolistic markets where firms face different elasticities for price increases versus price decreases.

Oligopolistic Competition

A market structure in which a few firms dominate. Each firm is aware of the actions of others and may engage in strategic decision making.