States That Are Required by Their Constitution to Have Annually

question 52

Multiple Choice

States that are required by their constitution to have annually balanced budgets are likely to _____ than those not required to balance their budget.

• A)have less severe business cycles
• B)have more severe business cycles
• C)grow faster
• D)have a better quality of life

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Definitions:

Long-run Equilibrium

A state in which economic forces such as supply and demand are balanced, and all adjustments to economic conditions have been made, often characterized by firms earning normal profit in perfectly competitive markets.

Short-run Equilibrium

A state where supply and demand are balanced at a particular price level within a short-term period, with at least one fixed input.

Cost

The amount of money or resources spent in the production of goods and services.

Economic Profits

The gap between the overall earnings and combined expenditures, taking into account both overt and hidden costs.