If the Government Has a Spending Flow That Exceeds the Revenues

question 115

Multiple Choice

If the government has a spending flow that exceeds the revenues it collects, the government will run a ________ that year.

• A) debt
• B) deficit
• C) debt and a deficit
• D) surplus

---

Definitions:

Long-Run Average Total Cost Curve

A graphical representation showing the lowest possible cost at which any given level of output can be produced in the long run.

Total Cost Curve

A graphical representation showing the total cost incurred by a firm in the production of goods or services at different levels of output.

Quantity

The volume of a physical or non-physical item or service.

Economies Of Scale

Economies of scale are cost advantages reaped by companies when production becomes efficient, leading to a reduction in the per-unit cost as the scale of operations increases.