Question

23. Which of the following statements is an example of a positive economics? A. specialization according to comparative advantage makes everyone better off B. public policy should aim to maximize consumers' well-being C. we should apply cost- benefit analysis to issues of loyalty, marital fidelity, acquisition of knowledge, and so on, and never be bound by moral principles and high ideals D. if the price of service declines, then the quantity demanded will tend to rise, all else equal E. none of the above 24. If government revenues equal 22% of GDP and government expenditures equal 25% of GDP, then there is a A. budget deficit. B. budget surplus. C. trade imbalance. D. trade deficit. E. an unsustainable debt-to-GDP ratio

Answer 1

23. D
24. A. Budget deficit
When government expenditure exceeds government revenue, government is running a budget deficit.