Question 11 (1 point) Assume that the municipal government of Lethbridge. Albert

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Question 11 (1 point) Assume that the municipal government of Lethbridge. Alberta, has taxes of $500 government purchases of $350, transfer payments of $150, and interest $50. The government budget would expenses of show a deficit of $50 show a surplus of $100 show a surplus of $50. be in balance with neither a surplus nor a deficit. Save Question 12 (1 point) Underground activities in the economy are se because they are not beneficial to the excluded from measurements of the GDP nation excluded from the measurements of GDP because there is no way of measurins

Explanation / Answer

Ans 11) The govt budget will show a deficit of $50

Budget= (Taxes-governmet purchases- transfer payment- interest payments)

= $(500-350-150-50)

= -$50

Ans 12) - Underground activities are excluded from the measurements of GDP because there is no way of measuring them.

There is no legal record of underground activities which makes it difficult for the government to calculate and include it in the GDP. It comprises mostly of criminal activities, black money market etc.

Ans 13)One reason why firm hires labour at w=MPN is

if w>MPN, the cost (w) of hiring additional workers exceeds the benefit (MPN) of hiring them , so they should higher fewer workers.

Ans14) Dutch disease may be evident in Canada because -canada is a resource based economy and doesn't have a strong manufacturing industry.

Dutch disease is a term used to describe an economic scenerio when there is development in a particular sector (eg- oil and natural gas) with its production or new discovery but the other sectors show least developments . Canada can suffer from it as it is highly dependent on its resources for development and other sectors like manufacturing lacks development.

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