Methods of Financing Government Spending Are Described by an Expression

question 4

Multiple Choice

Methods of financing government spending are described by an expression called the government budget constraint,which states the following

• A)DEFICIT = (G - T)= ΔMB + ΔBONDS.
• B)DEFICIT = (G - T)= ΔMB - ΔBONDS.
• C)DEFICIT = (G - T)= ΔBONDS - ΔMB.
• D)DEFICIT = (G - T)= ΔMB/ΔBONDS.

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Definitions:

Total Revenue

The full amount of income generated by the sale of goods or services by a company before any costs or expenses are subtracted.

ATC

Average Total Cost, which is calculated by dividing the total cost of production by the quantity of output produced. It includes both fixed and variable costs.

MC

Marginal Cost, which refers to the increase or decrease in the total cost of production when the output is adjusted by one additional unit.

AVC

Average Variable Cost, representing the variable costs (costs that change with production volume) per unit of output in economics.