Which of the Following Items Is Counted as Part of Government

question 102

Multiple Choice

Which of the following items is counted as part of government purchases?

• A)The federal government pays $2,000 in Social Security benefits to a retired person.
• B)The city of Athens,Ohio pays $10,000 to a tree-trimming firm to trim trees along city boulevards.
• C)The state of Nebraska pays $1,000 to help a low-income family pay its medical bills.
• D)All of the above are correct.

Understand the concepts of marginal utility and how it influences consumer purchasing behavior.

Comprehend the composition and implications of the consumer's budget line.

Analyze the effects of income and price changes on consumer choices and the budget line.

Recognize the utility-maximizing choices of consumers within budget constraints.

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Definitions:

Arbitrage Opportunities

Situations in which it is possible to simultaneously buy and sell assets in different markets or in different forms to benefit from price differences without risk.

Nominal Risk-free Rate

The interest rate on a risk-free security that does not account for inflation.

Purchasing Power Parity

An economic theory that states that the exchange rate between two currencies is equal to the ratio of the currencies' respective purchasing power.

Relative Purchasing

The comparison of the purchasing power of various currencies against goods and services, adjusting for their price differences in different countries.