Asked by
Urskin Winston
on Nov 11, 2024
Verified
If the U.S.government spent $20 million paying people to dig holes in 2005 and then spent $30 million paying the same people to fill the holes up again that same year,we would expect the net effect to be a(n) :
A) decrease in transfer payments
B) increase in the budget deficit as transfer payments increased
C) increase in the budget deficit as government purchases of goods and services increased by $50 million
D) increase in the budget deficit as government purchases of goods and services increased by $30 million
E) $10-million-dollar increase in the budget deficit
Transfer Payments
Payments made by the government to individuals for which no goods or services are provided in return, such as welfare benefits.
Budget Deficit
The situation where a government's expenditures surpass its revenue over a specific period, leading to borrowing or debt accumulation.
Government Purchases
Expenditures by government entities on goods and services that directly absorb resources and are part of the nation's gross domestic product (GDP).
- Acknowledge the repercussions of fiscal measures on the deficit of the budget and the aggregate national debt.
Verified Answer
AL
Learning Objectives
- Acknowledge the repercussions of fiscal measures on the deficit of the budget and the aggregate national debt.