When Analyzing the Impact of Government Consumption and Taxes in an Open

question 91

Multiple Choice

When analyzing the impact of government consumption and taxes in an open economy, we exclude transfer payments because:

• A) they are not paid for by taxes.
• B) in the aggregate, they do not generate a change in total spending on goods and services.
• C) the sums are so large as to be incalculable.
• D) the sums are so small as to be insignificant.

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Definitions:

Commission of a Tort

The act of committing a wrongful act, excluding breach of contract, for which a civil action can be brought.

Respondeat Superior

A doctrine under which a principal-employer is liable for any harm caused to a third party by an agent-employee in the course or scope of employment.

Apparent Authority

Apparent authority refers to a situation in which a person appears to be given power to act on behalf of another, thereby binding the principal through the agent's actions, even if the actual authority has not been granted.

Misrepresentation

The act of providing false or misleading information, intentionally or unintentionally, in a transaction.