Which of the Following Is Most Likely to Increase a Federal

question 142

Multiple Choice

Which of the following is most likely to increase a federal budget surplus?

• A)A higher inflation rate and a higher unemployment rate.
• B)A higher inflation rate and a lower unemployment rate.
• C)A lower inflation rate and a higher unemployment rate.
• D)A lower inflation rate and a lower unemployment rate.

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Definitions:

Marginal Cost

Marginal Cost is the additional cost incurred from producing one more unit of a good or service, an important concept in economics for decision-making regarding production levels.

Deadweight Loss

describes a loss of economic efficiency that can occur when the equilibrium for a good or a service is not achieved or is distorted by external factors like taxes or subsidies.

Demand Curve

represents the relationship between the price of a good and the quantity of that good consumers are willing to purchase.

Monopoly Power

Monopoly Power describes the ability of a company or entity to control the price and supply of a product or service, due to the lack of significant competition.