According to the Text, Just as the Economy Began to Improve

question 59

Multiple Choice

According to the text, just as the economy began to improve and state revenues started increasing, a new threat arose to threaten the newly balanced budget. It was the

• A) rising interest rates that increased the cost of borrowing.
• B) increasing health care costs due to recent efforts to reform the health care system.
• C) underfunded state pension system.
• D) rising salaries of teachers.
• E) state's public unions threatening a strike.

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Definitions:

Excess Capacity

A situation where a firm is producing at a level less than its maximum possible output, leading to unused resources.

Equilibrium Level

The equilibrium level is a state where supply and demand balance each other, and market forces such as price remain stable.

Monopolistically Competitive

A market structure where many firms sell products that are similar but not identical, allowing for some degree of market power.

Pure Monopolist

A market structure where a single seller dominates, facing no competition in selling its products or services.