The Persistence of Budget Deficits During the Last Several Decades

question 39

Multiple Choice

The persistence of budget deficits during the last several decades is not surprising because politicians will find

• A) budget surpluses more attractive than budget deficits.
• B) tax increases more attractive than increases in government expenditures.
• C) budget deficits more attractive than budget surpluses.
• D) reductions in government expenditures more attractive than tax reductions.

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Definitions:

Quantity Supplied

Quantity Supplied is the amount of a good or service that producers are willing and able to offer for sale at a particular price over a given period.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price level at a specific time.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that suppliers are willing to offer for sale, holding other factors constant.

Equilibrium Price

The market price at which the supply of an item equals the quantity demanded.