Which of the Following Statements Is Correct

question 51

Multiple Choice

Which of the following statements is correct?

• A) Consumer surplus equals the price paid for a good.
• B) An increase in price decreases consumer surplus.
• C) The consumer surplus from a good is always larger than the total benefit from the good.
• D) The consumer surplus from a good or service must always equal producer surplus.
• E) An increase in price has no effect on consumer surplus.

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Definitions:

Federal Outlays

The total spending by the federal government, including on defense, education, health services, and social security.

Fiscal Stimulus Package

Government measures, usually involving increased public spending and tax cuts, aimed at boosting economic activity during a downturn.

Federal Government

A system of government in which powers and responsibilities are divided between a national government and state or provincial governments.

Surplus Federal Budget

A situation where the federal government's revenues exceed its expenditures within a given fiscal period.