When Spending by the Federal Government Exceeds Net Taxes,_____

question 144

Multiple Choice

When spending by the federal government exceeds net taxes,_____.

• A)the price level tends to fall
• B)the money supply must fall
• C)the aggregate demand curve shifts rightward
• D)aggregate supply moves rightward
• E)there is a federal budget surplus

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Definitions:

Public Goods

Goods that are non-excludable and non-rivalrous, meaning individuals cannot be effectively excluded from use and where use by one individual does not reduce availability to others.

Marginal Social Benefit

The additional benefit to society from consuming one more unit of a good or service, considering both private and external benefits.

Marginal Social Cost

The additional cost to society as a whole for producing one more unit of a good or service.

Public Good

A product or service that is available for all people to consume, regardless of whether any individual pays for it or not, typically provided by the government.