Starting from a balanced budget, which of the following would NOT ...

[khang]

Starting from a balanced budget, which of the following would NOT cause a government budget deficit?
 
  A) A decrease in taxes
  B) An increase in spending of goods and services
  C) An increase in transfer payments
  D) A 50 percent increase in spending accompanied by a 50 percent increase in taxes

Question 2

Which of the following statements is FALSE?
 
  A) Comparative advantage is the principle upon which trade patterns are based.
  B) Opportunity cost measures the real cost to a country of producing a certain product.
  C) The gains from trade are the result of differences in opportunity cost and comparative advantage.
  D) A country that possesses an absolute advantage will always have a comparative advantage.

[ong527]

Answer to Question 1

D

Answer to Question 2

D