MBA 501 Final Exam (Exam 4)
1. Differentiate between the Federal deficit and the Federal debt.
The Federal deficit is an annual concept referring to the shortfall between Federal revenues and expenditures in one year’s budget. The Federal debt is the accumulation of borrowing which results from the series of deficits minus any surpluses.
2. Adam Smith once wrote: “What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom.” Evaluate in terms of the national debt.
This is an example of the fallacy of composition. What is true for the individual is not necessarily true for governments when it comes to borrowing. Government can refinance its debt. The government, unlike
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The reason for the over allocation is that the firm is not paying for all the costs of production. The five suggested ways for correcting for this over allocation of resources are: (1) individual bargaining; (2) the use of liability rules and lawsuits; (3) imposing a tax on producers; (4) direct controls such as legal mandates or restrictions; and (5) creating a market for externality rights.
10. Suppose a local coffee shop in the downtown area decides to purchase a neighboring abandoned lot and convert it into a garden area with outdoor seating.
(a) Does this decision create an externality? If so, what kind?
(b) Despite the city’s positive response to the coffee shop’s renovation, other businesses in the area have not followed suit in renovating the many decrepit buildings and abandoned lots. How might the presence of an externality be in part the cause of this?
(c) In response to the lack of effort on the part of businesses to renovate the downtown area, city council members to take action. What are some ways that the city government could promote this kind of revival?
a. It creates a negative externality.
b. The possible reason of the externality being a cause of this could be the fact that if other people follow suit there will be an oversupply of the same kind of a service which may further lead to the market failure
c. Government can apply specific taxes on businesses
4. What are externalities, and how do they typically affect the price of a good or service?
As we see in the articles the most common external being competitive situation, this has a huge impact on businesses if the competiors has a better product this could make the consumer choose that product, resulting in decline in sales. This being in
A fiscal deficit is when a government's total expenditures exceed the tax revenues that it generates. A budget deficit can be cut by either reducing public expenditure or raising taxes. In this essay, I am going to analyse the benefits and costs of increasing tax rates to reduce fiscal deficits instead of cutting government expenditure.
3. In the 1990’s the central business and residential districts of cities in the United States became the focus of a revitalization process. Discuss how each has contributed to this revitalization process.
What is an externality? Provide at least three examples. How does one of the examples you provided affect the market outcome? What is the role of government in addressing the implications of an externality you provided as an example? Is it possible that a government’s solution to a market failure would worsen the failure? Explain your answer.
We hear about the debt almost every day: news talks about it, politicians argue about it, even President Obama gives speeches on it. So what is the significance behind it? In this article I am going to explain briefly what the national debt is, how big it is, and what it has to do with us.
Woodlawn and Washington Park lack commercial vitality likely due to the low and declining residential density and the lack of disposable income needed to support retail development. Businesses in Woodlawn and Washington Park largely cluster along the neighborhoods’ commercial corridor with prime access to the CTA’s Green line Stations and are characterized by low sales volume and not much diversity. With large concentrations of vacant land and a lack of neighborhood amenities both neighborhoods will have an uphill struggle to start growing the residential base if done in isolation from UChicago and other non-profit and public partners.
The council that purchased the two buildings thought they were doing something good for the city when they spent $132,000 for the properties. Then they dropped the ball by not moving forward. Now is the time for the current council to resolve this one way or the other. Under this administration, numerous improvements have been made in the city. The parks and recreational facilities are constantly being upgraded. This is good but the lingering building issue remains a sore spot in the small
This will show how the debt and deficit affects taxpayers. Taxpayers get caught up in the government debt and are left to pay it off. Individual debt
Imaging yourself accepting you’re first credit card and immediately you begin to frivolously spend all the money your bank offers you. However, come to find out, you didn’t realize there was a consequence to your spending and now you are eagerly trying to pay back the money you owe with interest. Now take that scenario and apply it to our government spending in the United States. The author of “Going for Broke,” Michael Tanner, explains in his book the current financial crisis America is subjecting themselves to in the long run. Governmental officials of various political parties are turning blind eyes to the ever-increasing concern of stability in the United States. More of our taxing paying dollars are being used to chip away at an increasing debt that our government has no intent on fixing. The goal of this paper is to address Tanner’s issues with the growing economic deficit of the American people and its complacent government. Some questions Tanner emphasis on are: what can of debt does America have, where is the taxpayers' dollar being spent on, and what will happen to our economy if nothing is fixed?
National Debt in the U.S. has expanded rapidly throughout the years. In 2012-2015 it has increased by 70 percent. Most spendings are obviously spent by government in unnecessary facilities. Many people ask why is it affecting us and why has the government not issued a reform to solve it. This worries us because it doesn’t only involve an internal debt but a national debt as well.
This paper will attempt to answer the question: Is the federal deficit and government deficits in general a good or a bad thing? While it may be easy to lose sight of how the government chooses to handle its money, it is also important for citizens to be conscious of how their money is being spent, and whether or not the current course that the government is plotted on is either sustainable or the best allocation of resources.
(C) Externalities -- Companies produce some type of external cost that affects the community. The company would not voluntarily reduce or
External Opportunities (O) such as political, social and cultural changes, new product, increased demand, government policies, changes in technology and current and future economic conditions