As the Size of Government Increases as a Share of the Economy

question 157

Multiple Choice

As the size of government increases as a share of the economy,

• A) the burden of deadweight losses of taxation generally diminishes.
• B) the rate of return derived from projects undertaken by the government will tend to increase.
• C) the government generally becomes more heavily involved in unproductive and even counterproductive activities.
• D) the activities of government are generally limited to protective functions such as public safety , national defense, and provision of a limited set of public goods.

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Definitions:

Beginning Inventory

The inventory value ready for sale at the onset of an accounting cycle.

Reported Net Income

The profit or loss of a company after all expenses have been deducted from revenues, as presented in financial statements.

Accrued Payroll Liabilities

Obligations for salaries and wages that have been incurred but not yet paid to employees.

Retained Earnings

The portion of net income that is not distributed as dividends to shareholders, but retained by the company for reinvestment in its operations.