Government Deficits Mean That

question 8

Multiple Choice

Government deficits mean that

• A)national saving is negative so public saving is negative.
• B)national saving is negative so public saving is lower than otherwise.
• C)public saving is negative so national saving is negative.
• D)public saving is negative so national saving is lower than otherwise.

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Definitions:

Socially Optimal Price

The price of a product that results in the most efficient allocation of an economy’s resources and that is equal to the marginal cost of the product.

Unregulated Monopoly

A market structure in which a single supplier dominates the market without any government intervention or regulation.

Economically Efficient

A situation where resources are allocated in a way that maximizes the production of goods and services without wasting any resources.

Zero Economic Profits

A situation where a firm's total revenues exactly equal its total costs, indicating no supernormal profit but covering all operating expenses.