While Expanded Federal Programs Are Often Popular for Americans, This

question 60

Multiple Choice

While expanded federal programs are often popular for Americans, this much larger bureaucracy suffers during a downturn in economic growth, such as was experienced in the 1970s. Why does an economic downturn create such challenges?

• A) There are fewer citizens for the bureaucracy to serve.
• B) Economic downturns often create federal budget deficits that make it very difficult to continue supporting a large bureaucracy.
• C) State governments begin to take away the federal government's role in providing social benefits.
• D) Downturns in the economy always create international tensions that require a stronger military presence, which in turn drains off available resources.
• E) As the U.S. Constitution requires a balanced budget, the federal government must eliminate agencies when income decreases.

---

Definitions:

Total Revenue

The total receipts or income a firm receives from the sale of its products or services, calculated as the unit price times the quantity sold.

Average Revenue

The amount of income that a company receives per unit of sale, calculated by dividing total revenue by the number of units sold.

Total Revenue

Total revenue represents the total income a firm receives from selling its goods or services, calculated as the quantity sold multiplied by the price per unit.

Competitive Market

A market structure characterized by a large number of buyers and sellers, where no single entity has the power to significantly influence prices or market conditions.