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The Fiscal Deficit of a government is equal to Total Expenditure minus:
ATotal Revenue excluding Borrowing
BTotal Revenue including Borrowing
CTax Revenue only
DRevenue Expenditure
Zero-Based Budgeting (ZBB) requires that every budget line item be:
AIncreased by a fixed percentage over last year
BRe-justified from scratch (zero base) for each new budget cycle
CAdjusted solely for national inflation
DMatched by foreign aid grants
The Solow-Swan Neoclassical Growth Model identifies the long-run rate of growth of per capita output as depending on:
AThe rate of domestic savings
BGovernment spending deficits
CExogenous technological progress
DTariff structures
The endogenous growth theory (e.g., Romer Model) differs from Solow by asserting that long-run growth is driven by:
AExogenous population explosions
BForeign capital inflows
CDecreasing returns to scale
DEndogenous factors like investment in human capital, R&D, and innovation
The Lewis-Ranis-Fei Model elaborates on the Lewis dual-sector model by emphasizing the development of:
AAgricultural productivity to generate commercial food surplus for the industrial sector
BForeign exchange reserves
CHeavy military industries
DMining raw material exports
The High-Employment (Structural) Budget Deficit measures what the government budget deficit would be if:
AUnemployment were exactly zero
BThe economy were operating at potential full-employment GDP
CTax rates were doubled
DInflation were eliminated
The Real Business Cycle (RBC) theory asserts that economic fluctuations are primarily caused by:
AReal technology and supply-side productivity shocks
BChanges in government spending
CMonetary policy shocks
DFluctuations in consumer confidence
The Rational Expectations Hypothesis in macroeconomics was pioneered by:
AJohn Maynard Keynes
BMilton Friedman
CArthur Laffer
DRobert Lucas and Thomas Sargent
The third-degree price discrimination occurs when a firm charges different prices to different customer groups based on their:
ADifferences in price elasticity of demand
BVolume of purchases only
CExact individual reservation prices
DGeographic production location
According to the Lucas Critique, traditional macroeconomic evaluation of policy rules fails because:
AEconomic agents alter their expectations and behavior when policy rules change
BData collection is inherently inaccurate
CMonetary policy has no time lag
DFiscal multipliers are always constant