Spencer and Brander's Model Highlights the Conventional Assumption That

question 19

Multiple Choice

Spencer and Brander's model highlights the conventional assumption that

• A) government involvement in business or in the economy tends to fail.
• B) government subsidies tend to waste taxpayer's money.
• C) government subsidies cannot create a successfully competing export.
• D) government tends to distort when it displaces Adam Smith's Invisible Hand.
• E) government subsidies can produce profits that exceed the subsidy's value.

---

Definitions:

Minimum Lease Payments

The least amount of payments over the leasing period, including any residual value, guaranteed by the lessee under a lease agreement.

Unearned Interest

Interest that has been collected on a loan by a lender but not yet earned, usually because the loan has not reached its maturity.

Lessor's Financial Statements

Financial documents provided by the owner (lessor) reflecting the financial health and performance of assets leased out.

Contra-Asset

A contra-asset account is a negative asset account that offsets the balance on the asset account with which it is paired.