With No Change in Fiscal Policy, the Budget

question 81

Multiple Choice

With no change in fiscal policy, the budget

• A)will run a surplus during a recession and a deficit during a boom.
• B)deficit will rise during a recession and fall during a boom.
• C)deficit will fall during a recession and rise during a boom.
• D)will remain unchanged by adverse economic conditions.

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Definitions:

Monopolized

Dominated or controlled entirely by a single entity, often in reference to a market situation where one firm holds the majority market share.

Lerner Index

A measure of a firm's market power and pricing strategy, defined as the difference between price and marginal cost, scaled by price.

Elastic

Describes a situation where the quantity demanded or supplied of a good or service changes significantly in response to price changes.

Inelastic Demand

Describes a situation where the demand for a product does not change significantly in response to a change in the product's price.