If the City Expends More During the Budget Year Than

question 26

Multiple Choice

If the city expends more during the budget year than it receives during the budget year in revenues that are available to finance the expenditures, it will

• A)increase interperiod equity.
• B)decrease interperiod equity.
• C)increase taxes.
• D)force the city to fire some employees.

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Definitions:

Utility Per Dollar

A measure of the satisfaction or usefulness obtained from purchasing goods or services relative to the amount of money spent.

Diminishing Marginal Utility

The principle stating that as more of a good or service is consumed, the marginal benefit of additional units will decline.

Utility Maximization

The process by which consumers adjust their consumption to achieve the highest level of satisfaction from their available resources.

Marginal Utility

The incremental pleasure or advantage obtained by consuming an extra unit of a good or service.