Which of the Following Is TRUE of the U

question 133

Multiple Choice

Which of the following is TRUE of the U.S. trade balance and the federal government budget?

• A) In most years since the 1970s, both have been in surplus.
• B) In most years since the 1970s, both have been in deficit.
• C) Both exhibited greater variability before the 1970s than they have since.
• D) The federal government budget deficit was more variable before the 1970s, but the trade deficit has been more variable since.

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Definitions:

Special-Interest Issue

An issue that generates substantial individual benefits to a small minority while imposing a small individual cost on many other citizens. In total, the net cost to the majority might either exceed or fall short of the net benefits to the special-interest group.

Crony Capitalism

A situation where the institutions of markets are maintained, but the allocation of resources, and the profit and loss of businesses, are determined by political decision-making rather than consumer purchases and market forces. To a large degree, the activities of business firms are directed and controlled by government spending and regulation. In turn, many of the business firms will use contributions and other forms of political support to compete for government favors.

Government Favors

Benefits or advantages granted by the government to specific groups, businesses, or individuals, potentially influencing market outcomes and competitiveness.

Price Floor

A legally established minimum price buyers must pay for a good or resource.