Should government increase taxes to balance the budget

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Q. Which of the following provides the best explanation for diseconomies of scale?

Answer
A. Increased specialization.
B. Diminishing marginal productivity.
C. Monitoring costs.
D. Indivisible set-up costs.

Q. Assume the government is running a budget deficit. Should the government raise taxes to balance the budget? Should the government decrease spending to balance the budget (must pick one or both). What are the pros and cons of each action?

Reference no: EM1363282

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