In a Situation in Which Rationing Is by Queues, the Total

question 114

Multiple Choice

In a situation in which rationing is by queues, the total price of the rationed good is

• A) equal to the funds paid for the good.
• B) less than the funds paid for the good.
• C) equal to the funds paid for the good plus the opportunity cost of the time spent waiting.
• D) equal to the funds paid for the good less the opportunity cost of the time spent waiting.

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Definitions:

Fiscal Policy

Government strategies involving taxation and spending to influence the economy, aiming at achieving economic stability and growth.

Federal Budget

An annual financial statement presenting the government's proposed revenues and spending for the upcoming fiscal year.

Automatic Stabilizers

Economic policies and programs designed to offset fluctuations in a nation's economic activity without additional government intervention.

Recession

A noticeable drop in economic activity that affects the entire economy, enduring beyond several months, usually evidenced in real GDP, real income, employment, industrial production, and wholesale-retail sales.